In case of documents found qua other assessee at the time of search by Income Tax, the Assessing Officer must be satisfied and it should be specifically mentioned that the documents so seized belonged to the assessee – the other person u/s 153C; SC.
- 10:30Supreme Court of India
Justice M R Shah & Justice Ashok Bhushan
The SC {M/S SUPER MALLS PRIVATE LIMITED v. PRINCIPAL COMMISSIONER OF INCOME TAX 8, NEW DELHI } holds that there can be two eventualities. It may so happen that the Assessing Officer of the searched person is different from the Assessing Officer of the other person and in the second eventuality, the Assessing Officer of the searched person and the other person is the same. Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, there shall be a satisfaction note by the Assessing Officer of the searched person and that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall forward his satisfaction note to the Assessing Officer of the other person and is also required to make a note in the file of a searched person that he has done so.
However, the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings under Section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc. so seized during the search and seizure from the searched person belonged to the other person and transmitting such material to the Assessing Officer of the other person is mandatory.
However, in the case where the Assessing Officer of the searched person and the other person is the same, it is sufficient by the Assessing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. In case, where the Assessing Officer of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. However, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself.
In the present case, the short question which is posed for the consideration of the Supreme Court is, whether there is a compliance of the provisions of Section 153C of the Act by the Assessing Officer and all the conditions which are required to be fulfilled before initiating the proceedings under Section 153C of the Act have been satisfied or not?
The facts of the case: 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 under Section 153C of the Act by the Assessing Officer - subject matter of challenge before the SC. The appeals were dismissed by the SC of the appellant/assessee.