| The Tax Publishers2020 TaxPub(DT) 0606 (Ahd-Trib) INCOME TAX ACT, 1961
Section 254(2)
For taking cognizance under section 153C, it is mandatory that the AO of the searched person should record a satisfaction note exhibiting fact that during the course of search certain documents belonged to other persons were found and perusal of these documents would indicate that taxable income of the assessee has escaped assessment and after this satisfaction note, he would transmit record along with these documents to the AO who has jurisdiction over such other persons.
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Appeal (Tribunal) - Rectification under section 254(2) - Mistake apparent - Miscellaneous application filed
Assessee was a partnership firm. During course of search operation in case of the assessee's partner, books of account belonging to assessee were found and seized. Accordingly, the AO initiated proceedings under section 153C against the assessee i.e., other person. CIT (A) confirmed the order passed by the AO. Further, Tribunal confirmed the order of the CIT(A). Aggrieved, assessee filed miscellaneous application for rectification of impugned order of Tribunal on the ground that the Tribunal failed to take cognizance of the proposition laid down by the jurisdictional High Court as referred by the assessee during course of hearing, thus, the Tribunal committed an apparent error. Held: For taking cognizance under section 153C, it is mandatory that the AO of the searched person should record a satisfaction note exhibiting fact that during the course of search certain documents belonged to other persons were found and perusal of these documents would indicate that taxable income of the assessee has escaped assessment and after this satisfaction note, he would transmit record along with these documents to the AO who has jurisdiction over such other persons. The said proposition was laid down by jurisdictional High Court as well as Supreme Court in various decisions. However, in instant case, no satisfaction was recorded by the AO of the searched person. Thus, the Tribunal failed to consider authoritative pronouncements of the Supreme Court as well as High Court referred by the assessee during the course hearing in right perspective, and hence, an apparent error was committed. Accordingly, the miscellaneous application filed by the assessee was allowed and the impugned order of the Tribunal was recalled.
REFERRED : CIT v. Calcutta Knitwears (2014) 362 ITR 673 (SC): 2014 TaxPub(DT) 1547 (SC) Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. (2007) 291 ITR 500 (SC): 2007 TaxPub(DT) 1257 (SC) Dy. CIT v. Lalit Kumar M. Patel (2013) 36 taxmann 554 (Guj) and CIT v. Nirajan K. Zaveri (2009) 20 DTR 153 (Guj): 2009 TaxPub(DT) 1426 (Guj-HC)
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, AHMEDABAD BENCH
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