M/S. Shri Vishnu Overseas (P) Ltd. Vs DCIT

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97 paragraphs · 948 words

These appeals have been filed against the orders of CIT(A)-2 & CIT(A)-3, Gurgaon dated 16.03.2018, 28.06.2021, 29.06.2021 & 30.07.2021 for AYs 2008-09 to 2014-15 arising from respective assessment orders passed under section 153C of the Act.

When the matter was called for hearing in these group cases, the learned counsel for the assessee at the outset pointed out that all the assessment orders in different appeals captioned above are vitiated in law for the reason that notice under section 153C issued in these cases precedes the corresponding satisfaction recorded in these cases. For instance in the case of Shri Vishnu Overseas P Ltd. cases, the notice under section 153C has been issued on 17.12.2015, whereas the corresponding satisfaction contemplated under section 153C has been recorded on 21.12.2015. Similarly, in the cases pertaining to Shri Vishnu Eatables India Ltd., the notice for assumption of jurisdiction under section 153C has been issued on 04.12.2015, whereas the satisfaction contemplated under section 153C has been recorded subsequently on 21.12.2015. The learned counsel thus contends that the jurisdiction assumed under section 153C by issuance of notice thereon stands vitiated owing to absence of satisfaction on the date of issuance of notice under section 153C. The learned counsel submits that subsequent recording of satisfaction under section 153C is of no consequence and is not capable of making good the inherent jurisdictional defect. The learned counsel thus submits that consequent assessment orders passed based on such non-est notices issued under section 153C in respective cases are clearly bad in law and no cause of action arises to the revenue in pursuance of such non-est assessment orders in all the captioned appeals.

On being confronted to the revenue on the aforesaid contention, the learned DR for the revenue presented the assessment records for the perusal of the bench to appreciate the factual position. The learned DR for the revenue also referred to the respective order sheets duly signed by the Assessing Officer and submitted that as per these order sheets, the Assessing Officer has asserted that the requisite satisfaction note was duly recorded prior to the issue of notice under section 153C of the Act. The learned DR thus assessee submitted that the actual date supposedly put on the satisfaction note are merely a typographical error and should be read in conjunction with the assertions made in the respective order sheets.

We have carefully considered the rival submissions on the point in issue. At the outset, we refer to a tabular statement filed by the assessee showing the factual matrix ITA wise.

Shri Vishnu Overseas (P) Ltd.

2008-09

2010-11

2011-12

2012-13

2013-14

2014-15

Appeal No.

3999/Del/2018

4000/Del/2018

4001/Del2018

4002/Del/2018

4003/Del/2018

4004/Del/2018

S.No.

Particulars

Panchanama dated

17.01.2014

Notice issued

u/s. 153C of the Act

17.12.2015

Satisfaction recorded by the A.O. of the person search and

of the

assessee

(common satisfaction)

21.12.2015

Grounds to challenge

the impugned assessment order as invalid because of

non est notice issued u/s. 153C of the Act

where satisfaction was recorded

later as above.

Gr. No.2 to 4

Shri Vishnu Eatables (India) Ltd

2008-09

2009-10

2010-11

2011-12

2013-14

Appeal No.

1440/Del/2021

1441/Del/2021

1442/Del/2021

1443/Del/2021

1440/Del/2021

S.No.

Particulars

Panchanama dated

17.01.2014

Notice issued u/s. 153C of the Act

04.12.2015

Satisfaction recorded by the A.O. of the person search and of the assessee (common

satisfaction)

10.12.2015

Grounds to challenge the impugned assessment order as invalid because of non est notice issued u/s. 153C of the Act where satisfaction was

recorded later as above.

Gr. No.2

On behalf of the assessee reference was made to the judgment rendered in the case of Pepsi Food P. Ltd., vs. ACIT (2014) 52 taxmann.com 220 (Del.) for the proposition that conclusive satisfaction that documents belongs to or pertain to as the case may be to a person other than such person, is paramount and a condition precedent for assumption of jurisdiction under section 153C of the Act. On facts, the satisfaction for the purposes of assumption of jurisdiction was recorded subsequent to issue of notice under section 153C of the Act and thus conclusive satisfaction was not available on the date of assumption or jurisdiction. It is further contended that subsequent recording of satisfaction after assumption of jurisdiction cannot act as supplement to cure the jurisdictional defect.

In the light of facts brought on record, it is straightway noticed that satisfaction notes have been recorded under section 153C subsequent to the issuance of respective notices to the assessee under section 153C of the Act. This factual position remains un-assailed. As a corollary, on the date of assumption of jurisdiction under section 153C by issuance of notice under section 153C, there was no satisfaction note available on the records of the revenue to unable the AO to put the provision of section 153C in motion. The issuance of notice under section 153C is therefore a complete non starter. The jurisdiction assumed by virtue of such notice is therefore clearly vitiated. The consequnt assessment orders in pursuance of such vitiated notices are thus clearly bad in law. On this score alone, all the assessment orders requires to be quashed. We do so accordingly.

In the light of observations made in the preceding paras, we do not consider it necessary to examine other grounds of appeal and other points of contention.

Resultantly, all the appeals of the assessee captioned above are allowed.

M/S. Shri Vishnu Overseas (P) Ltd. vs DCIT

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