IMPORTANT POINT
Additions in assessment – Before issuing notice under Section 153C of Income Tax Act, 1961, Assessing Officer of searched person must be satisfied that any document seized or requisitioned belongs to a person other than searched person.

JUDGMENT

M.R. SHAH, J.

As common question of law and facts arise in this group of appeals, and are with respect to common assessee, but with respect to different assessment years, all these appeals are being decided together by this common Judgment and Order.

2. For the sake of convenience, the facts of Civil Appeals arising from Special Leave Petition (C) Nos. 8449-8450/2017 arising from I.T.A. No. 453/2016 & Review Petition No. 16/2017 for Assessment Year 2008-09 are stated and considered. The facts in nutshell are as under:

2.1 By virtue of the authorization of the Director of Income Tax (Investigation), Chandigarh, a search and seizure operation under Section 132(1) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) was carried out on 8/9.04.2010 at the residential/business premises of Shri Tejwant Singh and Shri Ved Prakash Bharti group of companies at Karnal, Panipat and Delhi. A survey under Section 133A of the Act was also carried out at the business premises of M/s Super Mall (P) Limited – the assessee, at Karnal and New Delhi. That during the course of the search on 8/9.04.2010 at the residence of Shri Ved Prakash Bharti, a Director in the assessee company – M/s Super Mall (P) Limited, pen drive was found and seized from the vehicle parked in front of Shri Ved Prakash Bharti’s residence. That some documents were seized after taking out the print from the above said pen drive. The said documents contained the details of the cash receipts on sale of shops/offices at M/s Super Mall, Karnal, also besides other concerns. That as a consequence of the aforesaid search and seizure operation, a notice was issued to the assessee – M/s Super Mall (P) Limited (hereinafter referred to as the ‘Assessee’) under Section 153C of the Act by the Assessing Officer. At this stage, it is required to be noted that co-incidentally it so happened that the Assessing Officer of the assessee and the Assessing Officer of the search persons – Tejwant Singh and Ved Prakash Bharti was the same. The assessee filed its return for the assessment year 2008-09. The assessment for the assessment year 2008-09 was finalised by the Assessing Officer and additions were made in the assessment year 2008-09. The assessment order was the subject matter of appeal before the Commissioner of Income Tax (Appeals). The assessment order was challenged mainly on the ground that the satisfaction note recorded under Section 153C of the Act in respect of the assessee, i.e., a third party, was invalid. That the learned CIT (Appeals) dismissed the assessee’s appeal. However, the learned Income Tax Appellate Tribunal (for short ‘ITAT’) allowed the appeal preferred by the assessee and held that the satisfaction note recorded under Section 153C of the Act in respect of the assessee, i.e., a third party, was invalid. In the appeal before the High Court, by the impugned Judgment and Order, the High Court has allowed the said appeal preferred by the Revenue and has observed and held that there was a compliance of Section 153C of the Act. The High Court also observed that the Assessing Officer was justified in recording the satisfaction that the documents so seized “belonged” to the assessee. Consequently, the High Court has set aside the order passed by the learned ITAT and remanded the matter to the learned ITAT to hear the appeals afresh on merits. At this stage, it is required to be noted that the learned ITAT set aside the order passed by the learned CIT(Appeals) solely on the satisfaction note being invalid and did not enter into the merits. Therefore, the High Court set aside the learned ITAT’s decision with respect to satisfaction note recorded by the Assessing Officer under Section 153C of the Act. Hence, the present appeal.

2.2 Therefore, the short question which is posed for the consideration of this Court is with respect to the satisfaction note recorded