Agni Vishnu Ventures Pvt. Ltd v. Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON :22.06.2023 PRONOUNCED ON: 28.06.2023 CORAM THE HONOURABLE DR. JUSTICE ANITA SUMANTH W.P. Nos.24407, 24410, 24413, 24415, 24420, 24423, 24426 & 24430 of 2021 andWMP.Nos.25722, 25724, 25726, 25730, 25731, 25733, 25734, 25738, 25741,25743, 25744, 25749, 25750, 25755, 25756, 25761 & 25759 of 2021 W.P.Nos.25342, 25347, 25345, 25350, 25352, 25357, 25360, 25366, 25368 & 25370 of 2021 and WMP.Nos.26762, 26763, 26765, 26770, 26771, 26774, 26775, 26766, 26767,26776, 26777, 26782, 26784, 26788, 26790, 26793, 26794, 26796, 26797, 26798& 26799 of 2021 WMP.Nos.8049, 8050, 8052, 8053, 8056, 8057, 8059, 8061, 8064, 8065, 8067, 8068, 8074 & 8080 of 2022 W.P.Nos.20114, 20116, 20119, 20125, 20127 & 20130 of 2020 & WMP.Nos.24820, 24823, 24828, 24830, 24837, 24839, 24844, 24845, 24847, 24848, 24852 & 24853 of 2020 WMP.Nos.28643, 28645, 28646, 28648, 28649, 28660, 28662, 28656, 28657, 28674, 28677, 28652, 28653, 28679, 28682, 28686, 28687, 28669 & 28672 of 2021 W.P. Nos.25826, 25830, 25832, 25835, 25840, 25843, 25845 and 27078, 27083, 27085, 27092, 27096 & 27100 of 2021 andWMP.Nos.27303, 27305, 27309, 27310, 27312, 27313, 27314, 27315, 27322,27323, 27325, 27326, 2327, 27328 and 28543, 28548, 28545, 28553, 28555,28566, 28567, 28569, 28572, 28560, 28561, 28574 & 28576 of 2021 W.P.No.24407 of 2021: Agni Vishnu Ventures Pvt. Ltd.Represented by its Director Mr.S.Santhoskumar,No.76, Temple Towers,North Mada Street, Mylapore,Chennai-600 004.Tamil Nadu, India. ... Petitioner Vs 1.Deputy Commissioner of Income Tax, Central Wing Central Circle 2 (1), 1[st] Floor, Investigation Building, New No.46, Old No.108, Mahatma Gandhi Road, Chennai -600 034, Tamil Nadu. 2.Additional Commissioner of Income Tax, Central Range -2, Investigation Wing, 1st Floor, No.46, M.G.Road, Nungambakkam, Chennai -600 034. ... Respondents W.P. Nos.24407 of 2021 etc. batch Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari, to quash the Impugned Order dated 25.09.2021 and bearing Number ITBA / AST / M / 153C / 2021-22 / 1035891640 (1) for the Assessment Year 2012-2013 and the consequential Demand Notice dated 25.09.2021 issued under Section 156 of the Act, issued by the 1[st] Respondent. W.P.No.25342 of 2021: Rajan Narasimulu Jayaprakash Vs ... Petitioner 1.Deputy Commissioner of Income Tax, Central Wing, Central Cir 2(1), Investigation Wing, Room No.B3, Ground Floor, No.46, M.G.Road, Chennai - 600 034. 2.Additional Commissioner of Income Tax, Central Range-2, Investigation Wing, 1[st] Floor, No.46, M.G.Road, Nungambakkam, Chennai - 34. ... Respondents Prayer:Writ Petitions filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the records and quash the Impugned Order passed by the 1[st] Respondent dated 30.09.2021 bearing Number ITBA/AST/M/153C/2021-22/1036066951(1) for the Assessment Year 2009-2010 and consequential Demand Notice dated 30.09.2021 issued under Section 156 of the Act, for the Assessment Year 2009-2010 issued by the 1[st] Respondent. W.P.No.27154 of 2021: Vishnusurya Projects and Infra Pvt. Ltd.Represented by its Director Mr.S.Santhosh Kumar,No.76, Temple Towers, 2[nd] Floor,North Mada Street, Mylapore,Chennai-600 004.Tamil Nadu, India. Vs ... Petitioner 1.Deputy Commissioner of Income Tax, Central Circle 2 (1), Investigation Building, 1[st] Floor, New No.46, Old No.108, Mahatma Gandhi Road, Chennai -600 034, Tamil Nadu. 2.Additional Commissioner of Income Tax, Central Range -2, Investigation Wing, 1st Floor, No.46, M.G.Road, Nungambakkam, Chennai -600 034. ... Respondents Notice dated 30.09.2021 issued under Section 156 of the Act, for the Assessment Year 2009-2010 issued by the 1[st] Respondent. W.P.No.27154 of 2021: Vishnusurya Projects and Infra Pvt. Ltd.Represented by its Director Mr.S.Santhosh Kumar,No.76, Temple Towers, 2[nd] Floor,North Mada Street, Mylapore,Chennai-600 004.Tamil Nadu, India. Vs ... Petitioner 1.Deputy Commissioner of Income Tax, Central Circle 2 (1), Investigation Building, 1[st] Floor, New No.46, Old No.108, Mahatma Gandhi Road, Chennai -600 034, Tamil Nadu. 2.Additional Commissioner of Income Tax, Central Range -2, Investigation Wing, 1st Floor, No.46, M.G.Road, Nungambakkam, Chennai -600 034. ... Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari, calling for the records and quashing the Impugned Orders passed by the 1[st] Respondent under Section 153C of the Income Tax Act, 1961, dated 27.09.2021 and bearing Number ITBA / AST / M / 153C / 2021-22 / 1035940723 (1) for the Assessment Year 2011-2012 and the consequential Demand Notice dated W.P. Nos.24407 of 2021 etc. batch 27.09.2021 issued by the 1[st] Respondent under Section 156 of the Income Tax Act, 1961. W.P.No.25826 of 2021: Sri Balaji Charitable and Educational Trust Represented by its Trustee Mr. Dhilip Kumar 76 Temple Tower, North Mada Street,Mylapore Chennai 04. ... Petitioner Vs 1.Deputy Commissioner of Income Tax, Central Wing Central Circle 2 (1), New Income Tax Building, 46 MG Road, Nungambakkam, Chennai 34. 2.Additional Commissioner of Income Tax, Central Range -2, Income Tax Investigation Wing Building, 1st Floor No.46, M.G.Road, Nungambakkam, Chennai 34. ... Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari, calling for the records of the 1st Respondent and quashing the Assessment Order dated 30.09.2021 bearing Number ITBA / AST / M / 153C / 2021-22 / 1036088041 (1) for the Assessment year 2013-2014 and the consequential Demand Notice dated 30.09.2021 bearing DIN ITBA / AST / M / 153C / 2021 -22 / 1036088041(1) for the Assessment year 2013/2014 issued under sec. 156 of the Income tax Act 1961 by the 1st Respondent. W.P.No.27078 of 2021: Fourth Force Surveillance Indo Pvt. Ltd. Represented by its Authorized Signatory – R.J.Gokulram 76 Temple Towers, Third Floor,North Mada Street,Mylapore Chennai 04.... Petitioner Vs 1.Deputy Commissioner of Income Tax, Central Wing Central Circle 2 (1), New Income Tax Building, 46 MG Road, Nungambakkam, Chennai 34. 2.Additional Commissioner of Income Tax, Central Range -2, Income Tax Investigation Wing Building, 1st Floor No.46, M.G.Road, Nungambakkam, Chennai 34.... Respondents Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to Writ of Certiorari, calling for the records of the 1st Respondent and quashing the Assessment Order dated 25.09.2021 bearing Number ITBA / AST / S / 153C / 2021-22 / 1035893197 (1) for the Assessment year 2014-2015 passed under Sec.153C of W.P. Nos.24407 of 2021 etc. batch the Income Tax Act, 1961, and the consequential Demand Notice dated 25.09.2021 bearing number ITBA / AST / S / 156 / 2021 -22 / 1035893221(1) for the Assessment year 2014-2015 issued under sec. 156 of the Income tax Act 1961. W.P. Nos.24407 of 2021 etc. batch C O M M O N O R D E R This common order is passed in the cases of Agni Vishnu Ventures Pvt. Ltd., Rajan Narasimulu Jayaprakash, Vishnusurya Projects and Infra Pvt. Ltd., Sri Balaji Charitable and Educational Trust and Fourth Force Surveillance Indo Pvt. Ltd. as all challenges emanate from a search conducted in the premises of Agni Estates and Foundations Private Limited between 5[th] and 9[th] of July, 2018 and search in related locations, such as residential premises of the employees and Directors of the Agni group of companies. W.P. Nos.24407 of 2021 etc. batch C O M M O N O R D E R This common order is passed in the cases of Agni Vishnu Ventures Pvt. Ltd., Rajan Narasimulu Jayaprakash, Vishnusurya Projects and Infra Pvt. Ltd., Sri Balaji Charitable and Educational Trust and Fourth Force Surveillance Indo Pvt. Ltd. as all challenges emanate from a search conducted in the premises of Agni Estates and Foundations Private Limited between 5[th] and 9[th] of July, 2018 and search in related locations, such as residential premises of the employees and Directors of the Agni group of companies. I. Facts and rival contentions in the matter of M/s. Agni Vishnu Ventures Pvt Ltd. 2. The challenge is to orders of assessment dated 25.09.2021 passed in terms of Section 153C read with Section 143(3) of the Income Tax Act, 1961 (in short W.P. Nos.24407 of 2021 etc. batch ‘Act’) for assessment years (A.Y.) 2013-14 to 2018-19 as well as connected proceedings such as the notices itself u/s 153C of the Act and penalty orders. 3. The main grounds of challenge are:- (i)That procedure established under Rule 112(13) of the Income Tax Rules, 1962 (in short ‘Rules’) for examination of electronic records was not followed. (ii)The last of the authorizations for search under Section 132(9A) of the Act was on 04.09.2018 and the Deputy Director of Income Tax (Investigation) ought to have handed over the seized materials within a period of 60 days therefrom. The 60 day period ended on 04.11.2018. (iii)R2 has, vide counters filed in other matters acceded to the position that the seized material was handed over only on 22.08.2019, which is beyond the statutory period. (iv)Notices under Section 153A were issued on 01.11.2019 to Agni Estates and Foundations. Those notices and proceedings under Section 153A had been the subject matter of challenge in a batch of Writ Petitions in W.P.Nos.35076, 35082, 35086, 35088 and 35090 of 2019, which came to be dismissed on W.P. Nos.24407 of 2021 etc. batch 17.03.2021, as against which Writ Appeals in W.A.Nos.1111, 1112, 1113, 1114, 1116 and 1117 of 2021 have been filed and are stated to be pending. (v)Notices under Section 153C have been issued on 05.03.2021. (vi)According to the petitioner, satisfaction notes were not supplied initially. However, in the course of the hearing, since it is mandatory that the satisfaction notes be supplied to the assessee concerned, learned Senior Standing Counsel was so directed and the satisfaction notes have been supplied to the petitioner. This is also recorded in docket sheet noting dated 01.11.2022. Thus, this ground of challenge does not survive. (vii)The satisfaction note produced before the Court reads as follows: 1. There was search in the case of M/s. Agni Estates & Foundation Pvt Ltd, a Chennai based real estate company, on 05.07.2018. The company was incorporated in the year 1992 by Shri.Rajan Jayaprakash Narasimulu, who is a Director and the main person operating Agni group of companies. During the course of search on 05.07.2018, at M/s. Agni Plots, No:30/16, Conron Smith Road, Gopalapuram, Chennal -600086, certain incriminating materials with respect to foreign companies, bank accounts, trusts associated with the Agni Group of companies/ its Managing Director-main person Shri.R.NJayaprakash were found and seized vide annexure ANN/ARS/AGP/LS/S1 to S20. These seized materials pertain to the following entities: (i) M/s.Mine infra Consultants Pte Ltd., Incorporated in Singapore (ii) M/s.Yalova Holding Ltd, incorporated in Seychelles. (iii) M/s.Yarrow Properties Inc., incorporated in British Virgin Islands (iv) M/s Bramerton Investments Pte Ltd., incorporated in Singapore (v) M/s.A.S.Coal Resources Pte Ltd., incorporated in Singapore (vi) M/s.Featherfin Partners Pte Ltd., incorporated in Singapore(vii) M/s.Soach Global Strategic Investments Ltd., incorporated in Mauritius (viii) M/s.Astraea Funds Ltd., incorporated in (i) M/s.Mine infra Consultants Pte Ltd., Incorporated in Singapore (ii) M/s.Yalova Holding Ltd, incorporated in Seychelles. (iii) M/s.Yarrow Properties Inc., incorporated in British Virgin Islands (iv) M/s Bramerton Investments Pte Ltd., incorporated in Singapore (v) M/s.A.S.Coal Resources Pte Ltd., incorporated in Singapore (vi) M/s.Featherfin Partners Pte Ltd., incorporated in Singapore(vii) M/s.Soach Global Strategic Investments Ltd., incorporated in Mauritius (viii) M/s.Astraea Funds Ltd., incorporated in 2. M/s.Mine Infra Consultants Pte Ltd., Incorporated in Singapore. 90% shares of this entity is held by M/s.Agni Estates and Foundations Pvt Ltd, and the balance 10% shares are held by Shri.R.N.Jayaprakash and Shri.Dilip Kumar (en employee of M/s Agni Group). This Singapore entity has no actual operations, has no employees and is a shell company. This Singapore entity entered into an agreement with M/s AFCONS Constructions Middle East Ltd., UAE and several other companies, including M/S.A.S.Coal Resources Pte Ltd., Singapore, M/s.Bramerton Investments Pte Ltd., incorporated in Singapore. M/s.Yalova Holding Ltd, Incorporated in Seychelles, was promoted by Shri.R.N.Jayaprakash and has a bank accounts with Societe Generale Bank & Trust Singapore branch., with Bank J.Safra Sarasin at Singapore. 3. During the course of search at at M/s Agni Plots, No:30/16, Conron Smith Road, Gopalapuram, Chennai-600086, a set of loose sheets numbering from 1 to 106 were found and seized vide annexure ANN/ARS/AGP/LS/S-9. In the said loose sheets, pages 88 to 95 were Tax consultation advice, provided by M/s.RAF­FLES TAX, 120, Lower Delta Road, #10-05, Cendex Centre, Sin­gapore 169208, addressed to Shri.R.Sundararajan, Managing Partner of M/s.Sundararajan Associates, Chartered Accountants, No:7, Vyasarpadi Gangadharan Street, Numgambakkam, Chen­nai 600034. M/s.Raffles is a Singapore headquartered corporate solutions provider specialising in company formation, corporate secretarial, accounting, payroll, taxation, and expansion adviso­ry services. Shri. R.Sundararajan,CA is the auditor of the M/s.Agni group. The said consultation provided by M/s.Raffles, had against the date 04.05.2011, as below: “(i) Facts of the case X Ltd, an Indian Company has utilized the services of Mr.A for a contract in India.Mr.A for a contract in India. No payment has been made to A directly for this contract. The subsidiary of X Ltd based outside India is also undertaking projects in Dubai and Jordan.The subsidiary of X Ltd based outside India is also undertaking projects in Dubai and Jordan. X Ltd has entered into an agreement with a BVI company for the purpose of making payment to A.for the purpose of making payment to A. A owns a company In Singapore which has a bank account in Hongkong.in Hongkong. It is proposed that the payment to Mr.A will be made by the BVI company to A's company in Singapore as though the payment were for the project executed by X's sub­sidiary in Dubai/Jordan. Since the BVI company does not have a bank account, the Singapore company would act as its fund manager for the actual purpose of receiving and remitting funds and for this it will charge fund management fees at 5%.Query: 1. What would be the tax implication in Singapore in the case of the Singapore company in respect of the 5% fund management fees. 2. Is there any possibility of deeming the entire Income (not 5%) as income of Singapore company. (ii) Facts of the case The common understanding is that taxation in Singapore is receipt based taxation. Therefore only where an income is received in Singapore, taxation would arise in Singa­pore. In the case of Hongkong, however, taxation is source based. Therefore, if an Income has its source in Hongkong, no matter where it received, the income would be subjected to tax in Hong Kong." 1. What would be the tax implication in Singapore in the case of the Singapore company in respect of the 5% fund management fees. 2. Is there any possibility of deeming the entire Income (not 5%) as income of Singapore company. (ii) Facts of the case The common understanding is that taxation in Singapore is receipt based taxation. Therefore only where an income is received in Singapore, taxation would arise in Singa­pore. In the case of Hongkong, however, taxation is source based. Therefore, if an Income has its source in Hongkong, no matter where it received, the income would be subjected to tax in Hong Kong." The above makes it clear that for the services rendered in India ­by an individual the payments are being brought through overseas entities in to the Singapore subsidiary of the individual as if they were charges received for the services rendered by overseas ­companies outside India, for the evasion of taxes payable in India. 4. M/s.Soach Global Strategic Investments Ltd and M/s. Astraea Funds Ltd based in Mauritius invested in the shares of M/s.Agni Vishnu Ventures Pvt Ltd a company in India promoted by Shri.R.N.Jayaprakash. There is no credible explanation for the investments in M/s Agni Vishnu Ventures Pvt Ltd., From the information contained in the pendrive seized vide annexure ANN/SBC/RS/ED/S from the premises of Shri.R.Sundararajan, auditor of the Agni group on 19.03.2019 contained income details of Agni group from FYs: 2010-11 to 2017-18 totalling Rs.88,34,30,858/-, which includes Rs.17,39,00,000/- from AFCONS/OLFS during FY:2015- 16, 2016-17 and 2017-18 which were not offered to tax. The sum of Rs.88,34,30,858/-, includes Foreign remittances received by the group during the period FYs: 2010-11 to 2014-15 amounting to Rs.48,34,79,108 (US$ 96,75,000). 5. There is no credible income earning activities by the overseas concerns associated/floated by the Shri.R.N.Jayaprakash and for the receipt of foreign remittances into his companies promoted in India, including M/s.Agni Vishnu Ventures Pvt Ltd. The remit­tances into M/s Agni Vishnu Ventures Pvt Ltd are suspicious in nature. Hence, the seized materials and information found will have a bearing in the computation of the total income of M/s. Agni Vishnu Ventures Pvt Ltd. for AYs: 2013-14 to 2018-19. Hence, this is a fit case for assessment/re-assessment u/s 153C of the Income Tax Act, 1961. Issue Notice u/s 153C of the Income Tax Act, 1961 for AYS:2013-14 to 2018-19.Date:17.09.2020 Sd/- (M.Vivekandan) Deputy Commissioner of Income taxCentral Circle 2(1), Chennai. (viii)The petitioner challenges the prima facie findings in the satisfaction note stating that the entirety of the satisfaction is on the basis of certain loose sheets including a tax consultation advice provided by M/s.Raffles Tax to Shri.R.Sundararajan, Chartered Accountant at Chennai. W.P. Nos.24407 of 2021 etc. batch (ix)Such information is extracted in the satisfaction note and based on this information, the officer, prima facie, concludes that there have been certain remittances made overseas in respect of the services rendered in India.(x)He also refers to the investments made by Soach Global Strategic Investments Ltd. and Astraea Funds Ltd., both based in Mauritius, in the shares of the petitioner company and for this purpose refers to information contained in a pen drive that was seized from the premises of the Auditor on 19.03.2019. W.P. Nos.24407 of 2021 etc. batch (ix)Such information is extracted in the satisfaction note and based on this information, the officer, prima facie, concludes that there have been certain remittances made overseas in respect of the services rendered in India.(x)He also refers to the investments made by Soach Global Strategic Investments Ltd. and Astraea Funds Ltd., both based in Mauritius, in the shares of the petitioner company and for this purpose refers to information contained in a pen drive that was seized from the premises of the Auditor on 19.03.2019. (xi)The petitioner points out that the reference to 19.03.2019 relates to a search that had been conducted in another entity forming part of the Vel’s group of Institutions. A challenge is laid on the credibility of this information and whether at all it can be invoked to initiate the impugned proceedings, seeing as, in the present case, the proceedings are stated to be based on a search in Agni Foundations which took place in July, 2018. (xii)Finally, they draw attention to the statement of the Assessing Officer at paragraph 5 to the effect that the remittances made are ‘suspicious’ as there W.P. Nos.24407 of 2021 etc. batch was no credible income-earning activities by the concerns warranting such remittances at all. (xiii)The satisfaction note refers to A.Ys 2013-14 to 2018-19, in common for all years. After an exchange of notices and responses, the impugned assessments have come to be completed on 25.09.2021 and the Writ Petitions instituted thereafter. 4. Common counters have been filed by the respondents denying all averments in the writ affidavit. They would maintain that the assessments have been made in accordance with proper procedure and by officers vested with due authorization and jurisdiction. They also point out that the proper course of remedy would be for the petitioners to approach the appellate authority by way of statutory appeal. 5. As regards the argument relating to delay in handing over the seized material, the respondents point out that there is no delay at all, since the present assessments are under Section 153C of the Act and the timelines set out under the Act for handing over of the seized documents have been adhered to scrupulously. 6. The respondents would further submit that the petitioner was also given sufficient opportunity prior to completion of the proceedings. Hence, the principles W.P. Nos.24407 of 2021 etc. batch of natural justice have also been adhered to. In fact, the impugned assessments are only protective, as the substantive assessment has been made in the case of R.N.Jayaprakash. For this reason, even the demand has not been pursued. 7. The averments in the Writ Petition relating to improper procedure for conduct of search have not been pursued in the course of hearing. There is also nothing illegal or untoward pointed out in the timeline followed for transfer of seized material in terms of Section 132(9A) and the transfer is seen to have been effected within the time provided. 8. With the procedural aspects of the matter out of the way, one turns to the merits of the matter. The contents of the satisfaction note, the show cause notices and the assessment orders itself involve appreciation of several facts. Though the petitioner has vehemently argued that there is no basis for the prima facie conclusions in the satisfaction note that formed the basis for assessment, the petitioner has not placed any supporting documents in respect of this position before me and rightly so, as this Court would have been disinclined to entertain the same, being questions of fact. W.P. Nos.24407 of 2021 etc. batch 9. In fact, the impugned assessments are protective and would survive only if the substantive assessments in the hands of R.N.Jayaprakash are quashed. Thus, and as the demand raised has not pursued as against the petitioner, there is no difficulty faced by the petitioner on this score either. W.P. Nos.24407 of 2021 etc. batch 9. In fact, the impugned assessments are protective and would survive only if the substantive assessments in the hands of R.N.Jayaprakash are quashed. Thus, and as the demand raised has not pursued as against the petitioner, there is no difficulty faced by the petitioner on this score either. II. Facts and rival contentions in the matter of Vishnu Surya Ltd: 10. W.P. Nos.27154, 27157, 27168, 27166, 27181, 27160, 27184, 27186 & 27178 of 2021 challenge orders of assessment passed by the Assessing Officer under Section 143(3) read with Section 153 C consequent on the search in the case of Agni Estates and Foundations Pvt. Ltd. Orders of assessment state that in the course of search, certain incriminating materials had been found with respect to foreign companies, bank accounts and trusts associated with the Agni Group of companies and its Managing Director R.N.Jayaprakash. Being of the view that such materials related to the petitioner, satisfaction under Section 153C was drawn and notices issued. 11. Though the affidavit filed in support of the Writ Petition states that the conduct of search in the premises of Agni Estates and Foundation Pvt. Ltd. was itself W.P. Nos.24407 of 2021 etc. batch in violation of the proper procedure set out under Rule 112(13) of the Income Tax Rules, 1962, for examination of electronic record, this argument was not really pursued in the course of hearing. 12. The contentions raised in these matters are almost identical to those advanced in the case of Agni Vishnu Ventures Pvt. Ltd. and captured in the earlier portions of this order relating to that petitioner. 13. Since the basis of proceedings under Section 153C is the satisfaction note recorded, the note is extracted below: Satisfaction Note u/s 153C of the Income Tax Act, 1961 in the case ofM/s.Vishnu Surya Projects and Infra Pvt Ltd. (PAN AADCS07354) Formerly Vishnu Surya Logistic Pvt. Ltd. (Notification No.1/2019-20 dated 01.05.2019 of PCIT-3, Chennai.) 1. There was a search in the case of M/s. Agni Estates & Foundation Pvt Ltd, a Chennai based real estate company, on 05.07.2018. The company was incorporated in the year 1992 by Shri. Rajan Jayaprakash Narasimulu, who is a Director and the main person operating Agni group of companies. During the course of search on 05.07.2018, at M/s.Agni Plots, No:30/16, Conron Smith Road, Gopalapuram, Chennai-600086, certain incriminating materials with respect to foreign companies, bank accounts, trusts associated with the Agni Group of companies/ its Managing Director- main person Shri.R.N.Jayaprakash were found and seized vide annexure ANN/ARS/AGP/LS/S1 to S20. These seized materials pertain to the following entities: following entities: (i) M/s.Mine Infra Consultants Pte Ltd., incorporated in Singapore (ii) M/s.Yalova Holding Ltd, incorporated in Seychelles (iii) M/s.Yarrow Properties Inc., incorporated in British Virgin Islands (iv) M/s.Bramerton Investments Pte Ltd., incorporated in Singapore (v) M/s.A.S.Coal Resources Pte Ltd., incorporated in Singapore (vi) M/s.Featherfin Partners Pte Ltd., incorporated in Singapore (vii) M/s.Soach Global Strategic Investments Ltd., incorporated in MauritiusMauritius (viii) M/s.Astraea Funds Ltd., incorporated in ANN/ARS/AGP/LS/S1 to S20. These seized materials pertain to the following entities: following entities: (i) M/s.Mine Infra Consultants Pte Ltd., incorporated in Singapore (ii) M/s.Yalova Holding Ltd, incorporated in Seychelles (iii) M/s.Yarrow Properties Inc., incorporated in British Virgin Islands (iv) M/s.Bramerton Investments Pte Ltd., incorporated in Singapore (v) M/s.A.S.Coal Resources Pte Ltd., incorporated in Singapore (vi) M/s.Featherfin Partners Pte Ltd., incorporated in Singapore (vii) M/s.Soach Global Strategic Investments Ltd., incorporated in MauritiusMauritius (viii) M/s.Astraea Funds Ltd., incorporated in 2. M/s.Mine Infra Consultants Pte Ltd., incorporated in Singapore. 90% shares of this entity is held by M/s. Agni Estates and Foundations Pvt Ltd., and the balance 10% shares are held by Shri.R.N.Jayaprakash and Shri Dilip Kumar (en employee of M/s.Agni Group). This Singapore entity has no actual operations, has no employees and is a shell company. This Singapore entity entered into an agreement with M/s.AFCONS Constructions Middle East Ltd., UAE and several other companies, including M/s.A.S.Coal Resources Pte Ltd., Singapore, M/s.Bramerton Investments Pte Ltd., incorporated in Singapore. M/s.Yalova Holding Ltd, incorporated in Seychelles, was promoted by Shri.R.N.Jayaprakash and has a bank accounts with Societe Generale Bank & Trust Singapore branch., with Bank J.Safra Sarasin at Singapore. 3. During the course of search at at M/s.Agni Plots,No:30/16, Conron Smith Road, Gopalapuram, Chennai-600086, a set of loose sheets numbering from 1 to 106 were found and seized vide annexure ANN/ARS/AGP/LS/5-9. In the said loose sheets, pages 88 to 95 were Tax consultation advice, provided by M/s.RAFFLES TAX, 120, Lower Delta Road, #10-05, Cendex Centre, Singapore 169208, addressed to Shri.R.Sundararajan, Managing Partner of M/s.Sundararajan Associates, Chartered Accountants, No:7, Vyasarpadi Gangadharan Street, Numgambakkam, Chennai 600034. M/s. Raffles is a Singapore headquartered corporate solutions provider specialising in company formation, corporate secretarial, accounting, payroll, taxation, and expansion advisory services. Shri R.Sundararajan, CA is the auditor of the M/s.Agni group. The said consultation provided by M/s. Raffles, had against the date 04.05.2011, as below: "(i) Facts of the case X Ltd, an Indian Company has utilized the services of Mr.A for a contract in India. No payment has been made to A directly for this contract.The subsidiary of X Ltd based outside India is also undertaking projects in Dubai and Jordan. X Ltd has entered into an agreement with a BVI company for the purpose of making payment to A. A owns a company in Singapore which has a bank account in Hongkong. It is proposed that the payment to Mr.A will be made by the BVI company to A's company in Singapore as though the payment were for the project executed by X's subsidiary in Dubai/Jordan. Since the BVI company does not have a bank account, the Singapore company would act as its fund manager for the actual purpose of receiving and remitting funds and for this it will charge fund management fees or 5%Query 1. What would be the tax implication in Singapore in the case of the Singapore company in respect of the 5% fund management fees. 2. Is there any possibility of deeming the entire income (not 5%) as income of Singapore company (ii) Facts of the case The common understanding is that taxation in Singapore is receipt based taxation. Therefore only where an income is received in Singapore, taxation would arise in Singapore. In the case of Hongkong, however, taxation is source based. Therefore, if an income has its source in Hongkong, no matter where it received, the income would be subjected to tax in Hong Kong” 1. What would be the tax implication in Singapore in the case of the Singapore company in respect of the 5% fund management fees. 2. Is there any possibility of deeming the entire income (not 5%) as income of Singapore company (ii) Facts of the case The common understanding is that taxation in Singapore is receipt based taxation. Therefore only where an income is received in Singapore, taxation would arise in Singapore. In the case of Hongkong, however, taxation is source based. Therefore, if an income has its source in Hongkong, no matter where it received, the income would be subjected to tax in Hong Kong” The above makes it clear that for the services rendered in India by an individual the payments are being brought through overseas entities in to the Singapore subsidiary of the individual as if they were charges received for the services rendered by overseas companies outside India, for the evasion of taxes payable in India. 4. M/s.Soach Global Strategic Investments Ltd and M/s.Astraea Funds Ltd based in Mauritius invested in the shares of M/s. Vishnu Surya Logistics Pvt Ltd a company in India promoted by Shri.R.N Jayaprakash. There is no credible explanation for the investments in M/s. Vishnu Surya Logistics Pvt Ltd., From the information contained in the pendrive seized vide annexure ANN/SBC/RS/ED/S from the premises of Shri.R.Sundararajan, auditor of the Agni group on 19.03.2019 contained income details of Agni group from FYs:2010-11 to 2017-18 totalling Rs.88,34,30,858/-, which includes Rs 17,39,00,000/- received by the group from AFCONS/OLFS during FY 2015-16, 2016-17 and 2017-18 which were not offered to tax. The sum of Rs.88,34,30,858/-, includes Foreign remittances received by the group during the period FYs: 2010-11 to 2014-15 amounting to Rs.48,34,79,108 (US$ 96,75,000). In the said pendrive it was seen that a sum of US$ 13,43,625, that is Rs.6 Crores was received by the assessee on 03.03.2011 and 05.02.2011 (AY:2011-12). The pendrive also contained an entry dated 07.01.2014 for the receipt of US$ 1,32,250, that is Rs.59,05,666/- (AY:2014-15). These receipts have not W.P. Nos.24407 of 2021 etc. batch been admitted in the returns of income filed by the assessee for these years. 5. There is no credible income earning activities by the overseas concerns associated/floated by the Shri.R.N.Jayaprakash and for the receipt of foreign remittances into his companies promoted in India, including M/s.Vishnu Surya Logistics Pvt Ltd. The remittances into M/s. Vishnu Surya Logistics Pvt Ltd are suspicious in nature. Hence, the seized materials and information found will have a bearing in the computation of the total income of M/s. Vishnu Surya Logistics Pvt Ltd. for AYS: 2013-14 to 2018-19. Hence, this is a fit case for assessment/re-assessment u/s 153C of the Income Tax Act, 1961. Issue Notice u/s 153C of the Income Tax Act, 1961 for AYS 2011-12 to 2018-19. Date:21.01.2021 Sd/- (M.Vivekanandan) Deputy Commissioner of Income tax Central Circle 2(1), Chennai. 14. As can be seen, the satisfaction recorded in the case of both the petitioners aforesaid remains largely one and the same and the satisfaction is premised substantially on the brief for opinion and the opinion of R.Sundararajan, Chartered Accountant on 04.05.2011. W.P. Nos.24407 of 2021 etc. batch 15. It is also the petitioner’s case that the satisfaction notes are concocted and have absolutely no basis in reality. The petitioner points out that in the covering letter dated 11.02.2020, the Deputy Commissioner of Income Tax, Central Circle 2(2), being the Assessing Officer of the searched entity had forwarded to the Deputy Commissioner of Income Central Circle (2)(1), his satisfaction note and seized material in the case of the petitioner. The last paragraph of the aforesaid letter reads as follows: aforesaid remains largely one and the same and the satisfaction is premised substantially on the brief for opinion and the opinion of R.Sundararajan, Chartered Accountant on 04.05.2011. W.P. Nos.24407 of 2021 etc. batch 15. It is also the petitioner’s case that the satisfaction notes are concocted and have absolutely no basis in reality. The petitioner points out that in the covering letter dated 11.02.2020, the Deputy Commissioner of Income Tax, Central Circle 2(2), being the Assessing Officer of the searched entity had forwarded to the Deputy Commissioner of Income Central Circle (2)(1), his satisfaction note and seized material in the case of the petitioner. The last paragraph of the aforesaid letter reads as follows: On analysis of the electronic device seized vide annexure SBC/RS/ED/S from the residence of Sunder Rajan at B/9, Ceedeeyes Greenjade Apartments, No.33, Voc Main Road, Kodambakkam, Chennai-24, it is seen that material seized pertains to the M/s Agni Estates & Foundations Pvt Ltd and have bearing on the determination of the total income of M/s Vishnu Surya Projects & Infra Pvt Ltd. Since the jurisdiction of the case pertains to you, seized material vide annexure No.SBC/RS/ED/S is handedover. 16. As can be seen from the extract, the name of the petitioner, i.e., M/s. Vishnu Surya Projects and Infra Pvt. Ltd. is in a different font and hence according to them, this belies the credibility of the very document. They point out that the satisfaction note recorded by the Assessing Officer of the searched entity also contains the same flaw. 17. The proforma of recording satisfaction as well as the satisfaction recorded by the officer of the entity searched are both extracted below: Proforma for recording satisfaction under section 153C (To be filled by the Assessing Officer of the person referred to Section 153A) M/s.Vishnu Surya Projects & Infra Pvt. Ltd. W.P. Nos.24407 of 2021 etc. batch Search operation U/s.132 of the Income Tax Act was carried out in the case of Shri.Ishari.K.Ganesh, Smt.Arthi Ganesh, M/s. Vels Educational Trust, M/s.Vel Ganesh Educational Trust and M/s. Vels Institute of Science, Technology and Advanced studies on 19.03.2019. During the course of search operation, various electronic devices were found & seized vide annexure No.SBC/RS/ED/S from the residence of Sunder Rajan at B/9, Ceedeeyes Greenjade Apartments, No.33, Voc Main Road, Kodambakkam, Chennai-24. On being satisfied that the materials seized vide annexure ANN/SBC/RS/ED/S from the residence of Sunder Rajan at B/9, Ceedeeyes Greenjade Apartments, No.33, Voc Main Road, Kodambakkam, Chennai-24, have a bearing on the determination of the total income of M/s Vishnu Surya Projects & Infra Pvt Ltd for the various Assessment Years from A.Y. 2009-10 to A.Y.2019- 20 and this case is fit case for issuing of noice u/s 153C. Sd/- (G.AJAY ROBIN SINGH) Deputy Commissioner of Income taxCentral Circle 2(2), Chennai 18. While the searched officer records satisfaction on the basis of materials seized in the course of search in Vel’s Educational Trust, the satisfaction note recorded by the Assessing Officer of the petitioner only refers in general, to material seized during the search in the case of Agni Estates and Foundation Pvt. Ltd. There is thus a contradiction pointed out by the petitioner as to whether the satisfaction W.P. Nos.24407 of 2021 etc. batch emanates from the material found in Agni Estates and Foundation Pvt. Ltd. or in Vel’s group. Sd/- (G.AJAY ROBIN SINGH) Deputy Commissioner of Income taxCentral Circle 2(2), Chennai 18. While the searched officer records satisfaction on the basis of materials seized in the course of search in Vel’s Educational Trust, the satisfaction note recorded by the Assessing Officer of the petitioner only refers in general, to material seized during the search in the case of Agni Estates and Foundation Pvt. Ltd. There is thus a contradiction pointed out by the petitioner as to whether the satisfaction W.P. Nos.24407 of 2021 etc. batch emanates from the material found in Agni Estates and Foundation Pvt. Ltd. or in Vel’s group. 19. According to them, there is no clarity in this matter. As the satisfaction recorded by the two Assessing Officers of the entity searched as well as the Receiving Officer fasten a serious liability on the assessee, it is incumbent upon the Assessing Officers to be clear and categoric on the basis upon which they initiate the proceedings. In light of the contradictions that they have pointed out they would urge that this Court eschew the satisfaction note that would, consequently vitiate the proceedings in full. 20. In this context, they rely upon the decision of the Patna High Court in the case of Chandreshwari Prasad Narain Deo and Others V. State of Bihar and another[1]. In that case, the Court held that it was well established that where the jurisdiction of administrative authority depends upon a preliminary finding of fact, the High Court is entitled in a proceeding for a Writ of Certiorari to determine whether or not that finding of fact was correct. The Court, quoting Farewell L.J. in R. V. Shoreditch Assessment Committee[2] held as follows: 1 AIR 1956 Patna 104 2 (1910) 2 KB 859 W.P. Nos.24407 of 2021 etc. batch 25. It is well established that where the jurisdiction of an administrative authority depends upon a preliminary finding of fact, the High Court is entitled in a proceeding for a writ of certiorari to determine upon its independent judgment whether or not that finding of fact is correct. The matter has been very well put by Farwell L.J. in – ‘R.v. Shroreditch Assessment Committee’, (1910) 2 KB 859 at p.879 (A):authority depends upon a preliminary finding of fact, the High Court is entitled in a proceeding for a writ of certiorari to determine upon its independent judgment whether or not that finding of fact is correct. The matter has been very well put by Farwell L.J. in – ‘R.v. Shroreditch Assessment Committee’, (1910) 2 KB 859 at p.879 (A): “The existence of the provisional list is a condition precedent to their jurisdiction to hear and determine, and as the claimant is entitled to require them to hear and determine, they cannot refuse to take the steps necessary to give ??? to such jurisdiction; if they do, their refusal may be called in question in the High Court, No tribunal of inferior jurisdiction can by its own decision finally decide on the question of the existence or extent of such jurisdiction: such question is always subject to review by the High Court, which does not permit the inferior tribunal either to usurp a jurisdiction which it does not possess, whether at all or to the extent claimed, or to refuse to exercise a jurisdiction which it has and ought to exercise.jurisdiction to hear and determine, and as the claimant is entitled to require them to hear and determine, they cannot refuse to take the steps necessary to give ??? to such jurisdiction; if they do, their refusal may be called in question in the High Court, No tribunal of inferior jurisdiction can by its own decision finally decide on the question of the existence or extent of such jurisdiction: such question is always subject to review by the High Court, which does not permit the inferior tribunal either to usurp a jurisdiction which it does not possess, whether at all or to the extent claimed, or to refuse to exercise a jurisdiction which it has and ought to exercise. 21. Thus, according to them, the very initiation of the impugned proceedings has been shaken by virtue of the inconsistencies and flaws in the satisfaction note. They also point out that the satisfaction note refers only to materials found pertaining to assessment years 2011-12 and 2014-15, whereas in conclusion, the Assessing Authority issues notices for AYs 2013-14 to 2018-19. This is contrary to the dictum of the Hon’ble Supreme Court in the case of Commissioner of Income Tax V. Sinhgad Technical Education Society[3]. 3 397 ITR 344 W.P. Nos.24407 of 2021 etc. batch 22. In that case, the Hon’ble Supreme Court affirmed the position that the assessment under Section 153C could only be made, if seized material was found relating to that year. Both satisfaction notes are expected to be concise and pointed with regard to the searched materials and to which year they relate in respect of which incriminating materials have been found and hence, it is only in respect of those years that notices under Section 153C that may be issued. 23. In the absence of any material being found or referred to in the satisfaction note to support that the investments of the foreign entities constitute income in the hands of the petitioner that would have a bearing on the determination of income as per the provisions of Section 153C, the impugned proceedings are wholly bad in law. 24. They also rely upon, in this context, a judgment in the case of Barium Chemicals Ltd. and another V. Company Law Board and others[4] for the same proposition, particularly paragraphs 28 and 29 thereof as well as the decision of the Delhi High Court in the case of Pepsi Foods (P) Ltd. V. Assistant Commissioner of Income Tax[5]. 4 AIR 1967 SC 295 5 ((2014) 52 taxmann.com 220 (Delhi) W.P. Nos.24407 of 2021 etc. batch 25. On the issue of principles of natural justice, the petitioner points out that show cause notices had been issued only for two AYs., i.e., 2011-12 and 2014-15 and not other years. They also point out to gross lapses in the procedure, such as notices under Section 143(2) being incomplete. For instance, notice under Section 143(2) dated 22.01.2021 for AY 2019-20 contains the heading ‘S.No. Issues’, but there are no serial numbers or issues enumerated therein. A notice of this sort is a farce and militates against being the basis for further adjudication proceedings. 26. In the present case, orders of assessment have been passed for A.Ys.2011-12 to 2013-14 under Section 143(3) read with Section 153C and for AYs.2014-15 to 2019-20 under Section 143(3). 27. Though notices under Section 153C have been issued in all cases, the satisfaction note refers only to two years (AYs. 2011-12 and 2014-15) and show cause notices have been issued only for those two years. Hence, the orders of assessment for the other years must go. 28. Prior to completion of proceedings, the petitioner has also specifically sought an opportunity of cross examination that has not been granted to it. This request is vide submission dated 29.03.2021, which is, admittedly, been received by W.P. Nos.24407 of 2021 etc. batch the officer on 31.03.2021. Despite this request being on record, the officer has proceeded to pass the impugned orders dated 27.09.2021 ignoring the same. III. Facts and rival contentions in the cases of Balaji and Fourth Force: 29. Sri Balaji Charitable and Educational Trust (in short ‘Trust’) is stated to be running a Engineering College in Chennai. At the relevant point in time, it held registration under Sections 12AA as well as exemptions in terms of Sections 10(23C) and 11 of the Act. 30. Fourth Force Surve