2011-12 and 2012-13. Since the grounds of appeal involved in all these appeals are common and on identical set of facts, therefore, these were heard together and are being disposed of by way of this consolidated order.

2. For the sake of ready reference grounds for A.Y. 2009-10 the following grounds of appeal have been raised which by and large are the same in all the years:-

"I. Whether Ld. CIT(A) has erred on facts and in law in deleting the addition made u/s. 69 of the I.T.Act,1961 on account of unexplained investment in J P Minda Group Companies aggregating to Rs. 5,12,00,000/-by the assessee company.

II. Whether Ld. CIT(A) has erred in deleting the addition despite the fact that the assessee failed to discharge its primary onus to satisfactorily explain source of investments made by the assessee company.

III. Whether Ld. CIT(A) has erred in on facts and in law in observing that requisite details and evidences were filed by the assessee to prove the genuineness of the claim despite the fact that based on the enquires conducted it was held that the assessee company is a paper/shell company and not doing any real business. " 3. Succinctly, the Revenue has challenged the following additions in respect of all the four assessment years:- Assessment year Addition.

2009-10 Rs.5,12,00,000/- on account of

un-explained investment in J P

Mindagroup companies.

2010-11 Rs.3,96,00,000/- on account of

un-explained investment in J P

Minda group companies.

2011-12 Rs.4,71,46,602/- on account of

un-explained investment in J P

Minda group companies.; and

Rs.4,71,46,602/- made u/s 68,

2012-13 Rs.5,92,00,000/- on account of

un-explained investment in J P

Minda group companies.

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4. It is important to note here that in so far as the additions made on account of unexplained investment, the Assessing Officer has made protective addition in the case of the assessee company and substantive addition has made in the case of J P Minda group of companies. It has been pointed out by the ld. Senior Counsel for the assessee, Shri Salil Aggarwal that in the Minda group of companies, the Tribunal has deleted the same very additions on merits.

5. However, Assessee has raised legal issues in his petitions made under Rule 27 of ITAT Rules wherein the assessee has raised following legal grounds:-

1. The captioned appeal filed by the revenue is fixed for hearing on 28.02.2022 (and even though the assessee has not received the grounds of appeal so raised by the Revenue), however, the assessee - respondent seeks to rely upon the order of Learned CIT (A) deleting all the additions on merit, by contending that the order of Learned CIT (A) need be upheld even on the ground that the assessment so framed is without jurisdiction as the same is a legal ground, which was taken before learned CIT (A) as well, however, the same can be taken at any stage of the proceedings even de - hors Rule 27 of I.T. Rules.

2 It is most respectfully submitted that since the assessee had succeeded in the appeal fully on merits, it did not prefer an appeal. However, the Revenue has since filed the instant appeal, the assessee-respondent seeks to support the order of the learned commissioner of Income Tax (Appeals) as provided in Rule 27 of the Income Tax Appellate Tribunal Rules, as such, in view of Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, the respondent seeks to raise, urge and argue the ground challenging the initiation of proceedings, in an appeal fired by the revenue. It is thus' prayed that the respondent be permitted to make its submissions in respect of the contention as was being specifically raised vide ground nos. 2 Page | 3

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and,4 before the learned commissioner of Income Tax (Appeals) and was also decided by him in his impugned order.

3. It is thus prayed, this application be taken as a notice of motion to following raise the legal ground, in support of the order of the learned commissioner of Income Tax (Appeals): "That the learned commissioner of Income Tax (Appears) has grossly erred in raw and on facts in sustaining the

initiation of proceedings under section I53C of the Act by

overlooking the basic fact that no addition was made based

on the satisfaction note, and the assessment as

contemplated under section I53C is not a de novo

assessment and as such the additions so made by assessing

officer which are beyond satisfaction note are liable to be

deleted in totality, as the same are outside the scope of

assessment made under section I53C of the Act."

It is therefore prayed, it be herd that proceeding initiated u/s 153c of

the Income Tax Act were bad in raw and order of reamed CIT (A)

need be upheld even on the ground of 'wrongful assumption of

jurisdiction on the part of learned AO to have framed assessment

under section l53C of the Income Tax Act.

4. It is submitted that this submission is being made in view of Rule

27 of the Income Tax Appellate Tribunal Rules and is otherwise well settled proposition of law that the respondent is entitled to raise a regal ground at any stage of the proceedings, even though he may not have filed an appeal against such an order. The Judicial pronouncements are as under:

1. 83 ITR 223 (Bom) (B.R.Bamsi v/s CIT)

2. 129 ITR 475 (Ail) (Moratia& Sons v/s CIT)

3. 220 ITR 398 (Ker) (CIT v/s Cochin Refinieries Ltd)

4. 176 CTR 406 (Gau) (Assam Company (I) Ltd v/s CIT) 5 l02 ITD l89 (Del) (ITO v/s Gurvinder Kaur)

6. 284 ITR S0 (SC) CIT V. Varas International p.Ltd.

7. 149 taxmann 456 (Guj) KharidVechan Sangh Ltd. vs CIT.

8. 397 ITR 282 (All) CIT Vs. Jindal Polyster Ltd.

5. The respondent thus prays that it be permitted to urge the aforesaid grounds as raised and mentioned in para 3 above."

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5.1 Similar grounds u/R 27 of ITAT Rules have been raised in the other years also.

6. The ld. Sr. Counsel stating the facts submitted that, a search and seizure operation under Section 132 of the Act was conducted on 20.09.2013 in Minda Group of companies. According to the Assessing Officer certain documents relating to the assessee were found and seized during the course of search in the case of M/s. Jay Ushin Limited, satisfaction note under Section 153C of the Act was recorded on 29.01.2016. Accordingly, he submitted that the 6 previous assessment years has to be counted from the date of recording of the satisfaction which is to be reckoned as date of search in the case where jurisdiction is assumed in case of "other person"

under Section 153C of the Act will start from assessment years 2010- 11 to 2015-16. Thus, assessment year 2009-10 is beyond the scope of 6 previous years as defined in Section 153A and, therefore, no assessment could have been framed for assessment year 2009-10 under Section 153C read with Section 153A of the Act. He further submitted that the amendment brought in Section 153C of the Act wherein the 6 assessment years immediately preceding assessment year was taken from the date of search by the Finance Act 2017. Therefore, prior to this amendment the date of search for the purpose of counting the 6 assessment years immediately preceding assessment year from the year of the search for the purpose of section 153C, shall be taken from the handing over of the seized documents or the date of satisfaction. This proposition has been held so by the Hon'ble Delhi High Court in the case of Pr. CIT Vs. Sarvar Agency Pvt. Ltd. 397 ITR 400 (Del.) and that this amendment cannot be read retrospectively.

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7. He further submitted that none of the additions made by the Assessing Officer are based on any incriminating documents found in the course of search or as recorded in the satisfaction note under Section 153C of the Act and, therefore, all additions made by the Assessing Officer are beyond the scope of assessment under Section 153A/153C of the Act. He drew our attention to the satisfaction note as placed in the paper book which for the sake of ready reference is reproduced here as under:-

"Satisfaction Note for issue of notice u/s 153C of the Income Tax Act. Name of the assessee : M/s. Panchmukhi Management Services Pvt. Ltd. A. Y. : 2008-09 TO 2013-14.

PAN : AADCP7635E.

Search and seizure action u/s 132 of the Income Tax Act was carried out on 20.09.2013 in the case of Minda Group of cases for A.Ys. 2008-09 to 2013-14 under Section 153A/143(3). The material seized from the premises of the assessee has been examined by the undersigned being the jurisdictional Assessing Officer. After examining such seized material I am satisfied that the following seized documents belong to persons other than Minda Group of cases. The details of such papers are as under:-

6

pertaining to assessment year 2010-11. However, there is no such

document for the assessment years 2009-10 and 2011-12. Apart from

that he submitted that the annual report which is a document cannot

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be treated as an incriminating material so as to assume jurisdiction under Section 153C of the Act. In support, he has strongly relied upon the consolidated decision of the Tribunal in the Minda Group of Companies in the cases of: (i) M/s. Jay Auto Components Ltd.; (ii) M/s. Jay Iron & Steel Ltd.; (iii) M/s. JPM Tools Ltd.; (iv) M/s. Jay Fe Cylinders Ltd., (v) M/s. Jay Ace Technologies Ltd., (vi) M/s. JJF Casting Ltd.; & (vii) M/s. Jay Nikki Industries Ltd. (order dated 23.12.2021) wherein the Tribunal vide para Nos. 6 and 18 has categorical held that original share certificates cannot be held to be incriminating material for drawing any adverse inference that any undisclosed income relating to assessee company has been un-earned or found and thus, these documents cannot be at all considered to be incriminating. Thus, most of the additions made by the Assessing Officer cannot be sustained. In support of his contention that only the incriminating material can be the basis of making the addition in the cases where assessments have attained finality and are not abated in terms of second proviso to Section 153A of the Act. He relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Sinhgad Technical Education Society (supra) and of Hon'ble Delhi High Court in the case of CIT Vs. RRJ Securities (2016) 380 ITR 612 (Del.) and ARN Infrastructure India Limited Vs. ACIT (2017) 394 ITR 569 (Del.) as well as in the case of Pr. CIT Vs. Index Securities Pvt. Ltd. (ITA. No. 566/2017).

9. Ld. Sr. Counsel further pointed out that this issue was categorically raised before the ld. CIT (Appeals) which is evident from page Nos. 5 to 7 of the appellate order. Accordingly, he submitted that the addition which has been deleted by the ld. CIT (Appeals) on merits should be sustained on the ground that these additions are beyond the scope of Section 153C of the Act.

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10. On the other hand, the ld. CIT DR submitted that the share certificates were found from the possession of the assessee and not from the possession of the share subscribers, which itself goes to show that in view of the debiting of share application money in the Minda group of companies was shady. On merits also he submitted that these companies have invested in Minda group and the investments in the form of share application money had come from bogus entities which were not found from the given addresses. He, thus, strongly relied upon the order of the Assessing Officer on the merits. In so far as the legal plea raised by the ld. Counsel for the assessee he strongly relied upon the order of the ld. CIT (Appeals) wherein he has decided this issue against the assessee.

11. We have heard the rival submissions, perusal the relevant findings in the impugned order as well as the material available before us. Here in this case search and seizure action had taken place on 20.09.2013 on the Minda group of companies. The satisfaction was recorded in the case of the assessee company on 29.01.2016. Therefore, in view of the said provisions of Section 153C of the Act the assumption of 6 previous assessment years from the year of search has to be reckoned from the date when the books of accounts or seized documents were handed over to the Assessing Officer or when the satisfaction was recorded. This proposition has been upheld by the Hon'ble Delhi High Court in the case of CIT-7 Vs. RRJ Securities (2016) 380 ITR 612 (Del) and ARN Infrastructure India Limited v. ACIT [2017] 394 ITR 569 (Del) as well as in the case of Principal Commissioner of Income ( Central)-2 vs Index Securities Pvt. Ltd ITA No 566/2017. If the date of search for the purpose of assessments under Section 153C of the Act is taken from the date when the books of accounts or seized documents were handed over and the Assessing Page | 9

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Officer or when the satisfaction was recorded, then the 6 assessment years immediately preceding assessment year in which search had taken place will start from assessment year 2010-11 to assessment year 2015-16. Thus, clearly the assessment for assessment year 2009- 10 is beyond the scope and ambit of Section 153A read with Section 153C of the Act. Accordingly, we hold that the assessment made for assessment year 2009-10 is invalid and is hereby quashed.

12. In so far as the ground raised by the assessee under Rule 27, which are arising from the facts and issue as discussed in the impugned order and discussed above that these additions are beyond the scope of assessment under Section 153A and 153C of the Act, we find that, before the ld. CIT (Appeals), following contention was raised, which has been corroborated in page Nos. 5 to 7 of the appellate order as under:-

" Addition made is beyond the scope of assessment u/s 153C for the year under appeal.

From the perusal of satisfaction note recorded on 29/01/2016 (the copy of satisfaction note is enclosed with the submission for A Y 2009-10 in the case of appellant company), it may be observed that it is mentioned in the satisfaction note that page no 28 to 34 of Annexure 0-2/A-ll is the photocopy of Annual Report. The Annual report of the company is the part of return filed with Registrar of Companies and is not the incriminating material.

As such the addition made by the Assessing officer in the order passed u/s 153C of the Income is not based on satisfaction recorded for re opening of assessment and as such the assessment have not been validly reopened u/s 153C of the Income Tax Act. In this regard your kind attention is drawn to Judicial ruling by Honble Delhi High Court in the case of Principal Commissioner of

Income ( Central)-2 vs. Index Securities Pvt Ltd ITA No 566/2017 in

which it has been held as under :-

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31. As resards the second jurisdictional requirement viz., that the seized documents mustbe incriminating and must relate to the AYs whose assessments are sought to bereopened, the decision of the Supreme Court in Commissioner of Income Tax-Ill, Punev. Sinhsad Technical Education Society (supra) settles the issue and holds this to be anessential requirement. The decisions of this Court in CIT-7v. RRJ Securities (2016) 380ITR 612 (Del) and ARN Infrastructure India Limitedv. ACIT [20171 394 ITR 569 (Del) also hold that in order to justify the assumption of jurisdiction under Section 153 Cof the Act the documents seized must be incriminating and must relate to each of the A Vs whose assessments are sought to be reopened. Since the satisfaction note forms the basis for initiating the proceedings under Section 153 C of the Act, it is futile for Mr Manchanda to contend that this requirement need not be met for initiation of the proceedings but only during the subsequent assessment.

From the perusal of the above it may be observed that documents for the year under appeal is not incriminating and thus, additions made by learned Assessing officer is beyond the scope as envisaged under section 153C of the Act, and thus, the assessment needs be quashed and additions made therein needs to be deleted. 3.2 No incriminating Material has been found in the case of assessee.

It is judicially settled position of law that additions u/s 153A / 153C

of the Income Tax Act, 1961 can only be made on the basis of

incriminating material found as a result of search or post search

inquiry conducted by Assessing Officer during assessment

proceedings. In this regard reliance is placed on the following judicial

ruling:-

i) Commissioner of Income Tax, (Central) - III Vs Kabul Chawla

ITA no 707/2014 (Delhi High Court)

ii) Principal Commissioner of Income Tax vs Kurele Paper Mills Pvt Ltd 2016 380 ITR 571 (Delhi High Court)

iii) Principal Commissioner of Income Tax vs Lata Jain 2016 384 ITR

543

iv) CIT vs Continental Warehousing Corporatio Ltd and All Cargo Global Logistic Limited 2015 374 ITR 645 ( Bombay High Court) Page | 11

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As such it is necessary to examine whether any incriminating material have been found with regard to investment made / credit appearing the bank account of the assessee. In this regard we have gone through the documents found during the course of search as well as assessment record. It is judicially settled position that incriminating material are those material which are related to unaccounted transactions i.e. if the transactions reflected in the said documents does not form part of books of accounts then the said document is called incriminating material. In this regard from the perusal of the assessment order it has been observed that the learned Assessing officer while passing the order discussed the following documents which have been found as a result of search:-

i) Shares allotted to different investors were found in the office / factory premises of JP Minda Group during search proceeding.

ii) Page no 50, Annexure A -1, Party 0-2 seized from the premises of Jay Ushin Ltd.

iii) Page no 106, Annexure A-4, Party 0-2 seized during the course of search from the premises of JP Minda group.

In this regard it may be observed that the documents mentioned above have nothing to do with the appellant company and is related to JP Minda Group. The detailed discussion in this regard has already been given in the appeal order passed in the case of companies of JPMinda Group/for instance in the case of Jay Fe Cylinders Ltd vide appeal no 59/16-17dated 16/08/20171. Further above document does not form part of satisfaction note and as such is not relevant in the case of appellant company.

From the perusal of the details discussed above it is proven beyond doubt that no incriminating material have been found during the course of search and as such the addition made by the assessing officer is not warranted under the law and is liable to be deleted. "

13. However, the ld. CIT (Appeals) has rejected this contention in a very summary manner. The relevant observations of the ld. CIT (Appeals) in this regard read as under:-

"These grounds being primary and basic the legal ground going to the root of assessment. Search and seizure operation u/s 132(1) of the Income Tax Act was carried out in J P Minda group of cases on 20/09/2013. Page | 12

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In the assessment order it has been mentioned by the Assessing officer that during the search and seizure operation documents belonging to the assessee were seized from the business and residential premises of J P Minda group and satisfaction note envisages u/s 153C was recorded on 29/01/2016 and accordingly a notice u/s 153C was issued to file the return of income.

In this regard the appellant submitted that in response to the notice so issued the assessee submitted the return of income in the prescribed form under protest along with request to furnish the copy of satisfaction note which lead to issuance of notice u/s 153C of the Income Tax Act. It has been seen that the AO has recorded the satisfaction as per law. It has also been submitted by appellant that provisions of section 153C (1) are almostsimilar and akin to that of Sec. 158BD (which was applicable to searches conducted upto31.05.2003) and It has been held by Hon'ble Delhi High Court in case of Janki Exports International v. UOI (2005) 278 ITR 296 (Del) and in Amity Hotels Pvt. Ltd.v. CIT (2005)

272 ITR 75 (Del) that where there is no evidence of satisfaction of A.O. regarding suppression of income, notice u/s 158BD is held to be not valid. The case law is distinguishable on the facts as the AO has recorded/conveyed the satisfaction as per the assessment record, hence complied with the provisions of law for framing the assessment and passing the order under Section 153C.

It has further been brought to my notice by the appellant about the satisfaction note recorded u/s 153C (combined for A Y 2008-09 to A Y 2013-14) in which year wise documents which have been relied upon by the Assessing officer for assumption of jurisdiction u/s 153C of the Income Tax Act are discussed. The satisfaction note mentions about the incriminating material so found to enable the AO to initiate proceedings u/s 153 C. The seized share certificates demonstrate that there indeed was material sufficient to warrant initiation of proceedings u/s 153 C. In this regard Supreme Court in Commissioner of Income Tax-Ill, Pune v. Sinhgad Technical Education Society settles the issue and holds this to be an essential requirement. The decisions by Hon'ble Delhi High Court

in the case of CIT-7 Vs. RRJ Securities (2016) 380 ITR 612 (Del) and ARN Infrastructure India Limited v. ACIT [2017] 394 ITR 569 (Del) as well as in the case of Principal Commissioner of Income ( Central)-

2 vs Index Securities Pvt. Ltd ITA No 566/2017 also hold that in order

to justify the assumption of jurisdiction under Section 153 C of the Act the

documents seized must be incriminating and must relate to each of the

AYs whose assessments are sought to be reopened. The AO has initiated

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the action based on satisfaction recorded per law, hence the citations above are not useful for the appellant.

Having considered these facts as above, the ground Nos. 2 and 4 in this respect are dismissed." 14. Nowhere, the ld. CIT (Appeals) has stated that the addition which has been made by the Assessing Officer are based on any seized

documents mentioned in the satisfaction note recorded under Section 153C of the Act. Despite noting the fact that only those additions can be made for the unabated assessments which are based only on the

incriminating material, as held by the Hon'ble Apex court in the case of CIT Vs. Sinhgad Technical Education Society (supra) and in the

case of CIT Vs. Kabul Chawla (supra) and other decisions quoted by him, he has summarily rejected the contention of the assessee that they are beyond the scope of addition or assessment for the unabated assessment years.

15. Apart from that, from the perusal of the satisfaction note as

incorporated above, only two documents can be said to be relevant to assessment years 2010-11 and 2012-13 and not for assessment year 2009-10 or 2011-12. Even the documents pertaining to assessment year 2010-11, we find that it is annual report of M/s. Panchmukhi Management Services Pvt. Ltd. as on 31.03.2012, which was an audit report and the financial statement of the assessee company. This document cannot be treated as incriminating, or can be inferred as indicating any undisclosed income or anything which can be corroborated by any other incriminating material found in the course of search. Thus, audited annual report per se cannot be treated as incriminating material. Similarly, the original share certificates dated 9.01.2010 which were transferred to the assessee company cannot be treated as incriminating, because, firstly, the Assessing Officer himself Page | 14

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has not taken cognizance of this document while making the additions. In any case, the original share certificates in any manner can be reckoned as incriminating without any corroborating document or material found in the course of search that they are not genuine or indicative of undisclosed income. Thus, none of the documents as mentioned can remotely be considered as incriminating so as to warrant any addition within the scope of assessment under Section 153A/153C of the Act in these years where assessments were not abated and attained finality. Accordingly, we hold that none of the additions made by the Assessing Officer in assessment year 2010-11 to 2012-13 are sustainable in the absence of any incriminating or material found during the course of search or the reservations and satisfaction note. On these grounds the additions made by the Assessing Officer are deleted.

16. In any case, here in this case, one important fact which is to be noted here that Assessing Officer has made protective addition in the case of the assessee and the substantive additions made in different concerns has already been deleted by the Tribunal on merits in the orders cited supra. Thus, the additions made on protective basis, cannot be sustained otherwise also.

17. In the result, all the appeals filed by the Revenue, are dismissed.

Order pronounced in the open court on : 28/02/2022. Sd/- Sd/-

( ANIL CHATURVEDI ) ( AMIT SHUKLA )

ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated : 28/02/2022.

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*MEHTA* Copy forwarded to

1. Appellant;

2. Respondent;

3. CIT

4. CIT (Appeals)

5. DR:ITAT

ASSISTANT REGISTRAR

ITAT, New Delhi.

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