P.r. Commissioner Of Income Tax(Central-Ii v. Aakash Arogya Mandir Pvt. Ltd

$~ *IN THE HIGH COURT OF DELHI AT NEW DELHI18.18.+ITA 509/2015 P.R. COMMISSIONER OF INCOME TAX(CENTRAL-II) Appellant Through: Ms. Suruchi Aggarwal, Senior Standingcounsel with Ms. Lakshmi Gurung, Advocate. versus AAKASH AROGYA MANDIR PVT. LTD. Respondent WITH ITA 510/2015 P.R. COMMISSIONER OF INCOME TAX(CENTRAL-II) Appellant Through: Ms. Suruchi Aggarwal, Senior Standingcounsel with Ms. Lakshmi Gurung, Advocate. versus AAKASH AROGYA MANDIR PVT. LTD. Respondent AND 22. +ITA 513/2015 P.R. COMMISSIONER OF INCOME TAX(CENTRAL-II) Appellant Through: Ms. Suruchi Aggarwal, Senior Standingcounsel with Ms. Lakshmi Gurung, Advocate. ITA Nos. 509, 510 & 513 of 2015 Signature Not Verified Page 1 of 6 versus AAKASH AROGYA MANDIR PVT. LTD. Respondent CORAM:HON'BLE DR. JUSTICE S. MURALIDHARHON'BLE MR. JUSTICE RAJIV SHAKDHER ORDER%28.07.2015 CM Nos. 13239/2015 & 13240/2015 (for exemption) 1. Exemption allowed subject to all just exceptions. 2. The application is disposed of. ITA 509/2015 3. These appeals by the Revenue under Section 260-A of the Income TaxAct, 1961 ('Act) are directed against the common order dated 28^''November 2014 passed by the Income Tax Appellate Tribunal (ITAT) inITA Nos.5440 /Del/2013 [relating to Assessment Year (AY) 2006-2007],ITA No. 5438/Del/2013 [relating to AY 2004-2005] and ITANo.5437/Del/2013 [relating to AY 2003-2004]. 4. The question that is sought to be urged by the Revenue in these appeals iswhether the Assessing Officer (AO) is required, for the purposes of SectionITA Nos. 509, 510 & 513 of 2015 Page 2 of 6 153- C of the Act, to record satisfaction even when the AO of the personsearched and the AO who exercises jurisdiction qua the Assessee is thesame? The ITAT has in the impugned order held that the AO has notrecorded his satisfaction qua the searched person in terms of the lawexplained by this Court in Pepsi Foods Pvt. Ltd. v. ACIT (2014)367 ITR112 (Del). 5. Ms. Suruchi Aggarwal, learned Senior Standing counsel for the Appellanttried to distinguish the cases on hand from the decisions in Pepsi Foods Pvt.Ltd. V. ACIT {supra) and Pepsico India Holdings Pvt. Ltd. v. ACIT (2015)370 ITR 295 (Del). According to her when the AO of the searched personand of the Assessee is the same, the AO need not separately record hissatisfaction qua the Assessee. She referred to an order dated 4^'' December2014 passed by this Court in ITA Nos. 662/2014, 663/2014 and 664/2014where one of the questions of law framed concerned the ITAT having setaside the initiation of proceedings under Section 153 C of the Acton theground that no written satisfaction has been recorded by the AO of thepersons searched. 6. In the first place, we do not find from the order dated 4"" December 2014 ITA Nos. 509, 510 & 513 of 2015 in ITA Nos. 662, 663 and 664 of 2014 that a question was framed as to thestatutory requirement of the AO recording satisfaction for the purposes ofSection 153 C of the Act being any different where the AO of the searchedperson and the Assessee is the same. 7. Secondly, as far as the facts of the present cases are concerned, theRevenue has placed no material to challenge the following fa:;tual findingrecorded by the ITAT in paras 5, 7.1 and 8 of the impugned order: "5 Information obtained by Ld. A.R. from A.O. ofsearched persons as placed at paper book pages 34-38clearly mentions that the satisfaction note with respect toother entities was not available/recorded by A.O. ofsearched person and further on the direction of Ld. D.R.,A.O., Central Circle -17, written to Ld. DR vide letter dated09.09.2014 wherein he had mentioned to have enclosedsatisfaction note recorded by the A.O. of such other person.The copy of satisfaction note attached with the letter clearlysuggests that the satisfaction note enclosed with the letterwas prepared by A.O. of other entities who had assumedjurisdiction by invoking provisions of Sectionl53C "5 Information obtained by Ld. A.R. from A.O. ofsearched persons as placed at paper book pages 34-38clearly mentions that the satisfaction note with respect toother entities was not available/recorded by A.O. ofsearched person and further on the direction of Ld. D.R.,A.O., Central Circle -17, written to Ld. DR vide letter dated09.09.2014 wherein he had mentioned to have enclosedsatisfaction note recorded by the A.O. of such other person.The copy of satisfaction note attached with the letter clearlysuggests that the satisfaction note enclosed with the letterwas prepared by A.O. of other entities who had assumedjurisdiction by invoking provisions of Sectionl53C 7.1 We observe that on the basis of replies obtained byAssessee under RTI and on the basis of reply of A.O.Central Circle-21, to Ld. D.R. the satisfaction note datedITA Nos. 509, 510 & 513 of 2015 Page 4 of 6 / 10.09.2010 is the satisfaction note prepared by A.O. of theother persons. This fact is further fortified from the fact thaton the same day of recording satisfaction on 10.09.2010, theA.O. had raised notices, u/s 153C of the Act as placed inpaper book Page-1. 8. Therefore, following the above precedents relied upon byLd. A.R., we hold that satisfaction was to be first recordedby A.O. of searched person, which in the present cases hasnot been done. The facts and circumstances of the presentappeals are similar to the case laws relied upon by Ld. A.R." 8. The Revenue has not placed any material to dispute the factual finding of the ITAT that the requirement of the law explained by this Court in PepsiFoods regarding the recording of satisfaction by the AO even in respect ofthe searched person was not ftilfilled. Consequently, the fact that it was thesame AO both for the searched person and the Assessee makes no differenceto the consequence of non-compliance with the legal requirement regardingthe recording of satisfaction. The Court also agrees with the ITAT that evenif the AO were the same, satisfaction would have to be recorded separatelyqua the searched person and the Assessee. ITA Nos. 509, 510 & 513 of 2015 9. No substantial question of law arises for determination. 10. The appeals are dismissed. S. MURALIDHAR, J JULY 28, 2015/dn RAJIV SHAKDHER, J ITA Nos. 509, 510 & 513 of 2015