P.R. Commissioner of Income Tax (Central-II) v. Aakash Arogya Mandir Pvt. Ltd.

3. These appeals by the Revenue under Section 260-A ofthe Income Tax Act, 1961 ('Act) are directed against the common order dated 28^'' November 2014 passed by the Income Tax Appellate Tribunal(ITAT)in ITA Nos.5440 /Del/2013 [relating to Assessment Year(AY)2006-2007], ITA No. 5438/Del/2013 [relating to AY 2004-2005] and ITA No.5437/Del/2013[relating to AY 2003-2004].

4. The questionthatis soughtto be urged by the Revenue in these appeals is whether the Assessing Officer(AO)is required,for the purposes ofSection ITA Nos.509,510&513of2015 Page2of[6] 153- C ofthe Act,to record satisfaction even when the AO ofthe person searched and the AO who exercises jurisdiction qua the Assessee is the same? The ITAT has in the impugned order held that the AO has not recorded his satisfaction qua the searched person in terms of the law explained by this Court in Pepsi Foods Pvt. Ltd. v. ACIT(2014)367ITR 112(Del).

5. Ms.Suruchi Aggarwal,learned Senior Standing counsel forthe Appellant tried to distinguish the cases on hand from the decisionsinPepsiFoodsPvt. Ltd.

V. ACIT{supra)and PepsicoIndia HoldingsPvt. Ltd. v. ACIT(2015) 370ITR 295(Del). According to her when the AO ofthe searched person and of the Assessee is the same, the AO need not separately record his satisfaction qua the Assessee. She referred to an order dated 4^'' December 2014 passed by this Court in ITA Nos. 662/2014, 663/2014 and 664/2014 where one ofthe questions oflaw framed concerned the ITAT having set aside the initiation of proceedings under Section 153 C of the Acton the ground that no written satisfaction has been recorded by the AO of the persons searched.

6. In the first place, we do not find from the order dated 4""December 2014 ITA Nos.509,510&513of2015 Page3of[6] in ITA Nos.662,663 and 664 of2014 that a question was framed as to the statutory requirement ofthe AO recording satisfaction for the purposes of Section 153 C ofthe Act being any different where the AO ofthe searched person and the Assessee is the same.

7. Secondly, as far as the facts of the present cases are concerned, the Revenue has placed no material to challenge the following fa:;tual finding recorded by theITAT in paras 5,7.[1] and 8 ofthe impugned order: "5 Information obtained by Ld. A.R. from A.O. of searched persons as placed at paper book pages 34-38 clearly mentions that the satisfaction note with respect to other entities was not available/recorded by A.O. of searched person and further on the direction of Ld. D.R., A.O.,Central Circle -17,written to Ld.DR vide letter dated 09.09.2014 wherein he had mentioned to have enclosed satisfaction note recorded by the A.O.ofsuch other person. The copy ofsatisfaction note attached with the letter clearly suggests that the satisfaction note enclosed with the letter was prepared by A.O. of other entities who had assumed jurisdiction by invoking provisions ofSectionl53C 7.[1] We observe that on the basis of replies obtained by Assessee under RTI and on the basis of reply of A.O. Central Circle-21, to Ld. D.R. the satisfaction note dated ITA Nos.509,510&513of2015 Page4of[6] / L 10.09.2010 is the satisfaction note prepared by A.O. ofthe other persons. This fact is further fortified from the fact that on the same day ofrecording satisfaction on 10.09.2010,the A.O. had raised notices, u/s 153C of the Act as placed in paper book Page-1.

8. Therefore,following the above precedents relied upon by Ld. A.R., we hold that satisfaction was to be first recorded by A.O. ofsearched person, which in the present cases has not been done. The facts and circumstances ofthe present appeals are similarto the case lawsrelied upon by Ld.A.R."

8. The Revenue has not placed any material to dispute the factual finding of the ITAT that the requirement ofthe law explained by this Court in Pepsi Foods regarding the recording ofsatisfaction by the AO even in respect of the searched person was not ftilfilled. Consequently,the fact that it was the same AO both for the searched person and the Assessee makes no difference to the consequence ofnon-compliance with the legal requirement regarding the recording ofsatisfaction. The Court also agrees with the ITAT that even ifthe AO were the same,satisfaction would have to be recorded separately qua the searched person and the Assessee. ITA Nos.509,510&513of2015 Page5of[6]

9. No substantial question oflaw arises for determination.

10. The appeals are dismissed.

S.MURALIDHAR,J JULY 28,2015/dn RAJIV SHAKDHER,J ITA Nos.509,510&513of2015 Page6of[6]