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SUPREME COURT OF INDIA
M.R. Shah, B.V. Nagarathna, JJ.
Income Tax Officer – Appellant
Versus
Vikram Sujitkumar Bhatia – Respondent
Civil Appeal No. 911 of 2022 (@ SLP (C) No. 29096 of 2019) with Civil Appeal No. 912 of 2022 (@ SLP (C) No. 29109 of 2019), Civil Appeal No. 913 of 2022 (@ SLP (C) No. 29115 of 2019), Civil Appeal No. 914 of 2022 (@ SLP (C) No. 29116 of 2019), Civil Appeal No. 915 of 2022 (@ SLP (C) No. 29118 of 2019), Civil Appeal No. 916 of 2022 (@ SLP (C) No. 29119 of 2019), Civil Appeal No. 917 of 2022 (@ SLP (C) No. 29120 of 2019), Civil Appeal No. 918 of 2022 (@ SLP (C) No. 29121 of 2019), Civil Appeal No. 919 of 2022 (@ SLP (C) No. 29122 of 2019), Civil Appeal No. 920 of 2022 (@ SLP (C) No. 29123 of 2019), Civil Appeal No. 921 of 2022 (@ SLP (C) No. 29124 of 2019), Civil Appeal No. 922 of 2022 (@ SLP (C) No. 29126 of 2019), Civil Appeal No. 923 of 2022 (@ SLP (C) No. 29128 of 2019), Civil Appeal No. 924 of 2022 (@ SLP (C) No. 29129 of 2019), Civil Appeal No. 925 of 2022 (@ SLP (C) No. 29130 of 2019), Civil Appeal No. 926 of 2022 (@ SLP (C) No. 29131 of 2019), Civil Appeal No. 927 of 2022 (@ SLP (C) No. 29132 of 2019), Civil Appeal No. 928 of 2022 (@ SLP (C) No. 29133 of 2019), Civil Appeal No. 929 of 2022 (@ SLP (C) No. 29134 of 2019), Civil Appeal No. 930 of 2022 (@ SLP (C) No. 29879 of 2019), Civil Appeal No. 931 of 2022 (@ SLP (C) No. 29880 of 2019), Civil Appeal No. 932 of 2022 (@ SLP (C) No. 29881 of 2019), Civil Appeal No. 933 of 2022 (@ SLP (C) No. 29882 of 2019), Civil Appeal No. 934 of 2022 (@ SLP (C) No. 29883 of 2019), Civil Appeal No. 935 of 2022 (@ SLP (C) No. 30535 of 2019), Civil Appeal No. 936 of 2022 (@ SLP (C) No. 30539 of 2019), Civil Appeal No. 937 of 2022 (@ SLP (C) No. 30542 of 2019), Civil Appeal No. 938 of 2022 (@ SLP (C) No. 30548 of 2019), Civil Appeal No. 939 of 2022 (@ SLP (C) No. 30549 of 2019), Civil Appeal No. 940 of 2022 (@ SLP (C) No. 30550 of 2019), Civil Appeal No. 941 of 2022 (@ SLP (C) No. 30551 of 2019), Civil Appeal No. 942 of 2022 (@ SLP (C) No. 486 of 2020), Civil Appeal No. 943 of 2022 (@ SLP (C) No. 492 of 2020), Civil Appeal No. 944 of 2022 (@ SLP (C) No. 493 of 2020), Civil Appeal No. 945 of 2022 (@ SLP (C) No. 496 of 2020), Civil Appeal No. 946 of 2022 (@ SLP (C) No. 499 of 2020), Civil Appeal No. 947 of 2022 (@ SLP (C) No. 504 of 2020), Civil Appeal No. 948 of 2022 (@ SLP (C) No. 505 of 2020), Civil Appeal No. 949 of 2022 (@ SLP (C) No. 526 of 2020), Civil Appeal No. 950 of 2022 (@ SLP (C) No. 527 of 2020), Civil Appeal No. 951 of 2022 (@ SLP (C) No. 528 of 2020), Civil Appeal No. 952 of 2022 (@ SLP (C) No. 529 of 2020), Civil Appeal No. 953 of 2022 (@ SLP (C) No. 530 of 2020), Civil Appeal No. 954 of 2022 (@ SLP (C) No. 531 of 2020), Civil Appeal No. 955 of 2022 (@ SLP (C) No. 536 of 2020), Civil Appeal No. 956 of 2022 (@ SLP (C) No. 537 of 2020), Civil Appeal No. 957 of 2022 (@ SLP (C) No. 538 of 2020), Civil Appeal No. 958 of 2022 (@ SLP (C) No. 618 of 2020), Civil Appeal No. 959 of 2022 (@ SLP (C) No. 621 of 2020), Civil Appeal No. 960 of 2022 (@ SLP (C) No. 622 of 2020), Civil Appeal No. 961 of 2022 (@ SLP (C) No. 624 of 2020), Civil Appeal No. 962 of 2022 (@ SLP (C) No. 689 of 2020), Civil Appeal No. 963 of 2022 (@ SLP (C) No. 819 of 2020), Civil Appeal No. 964 of 2022 (@ SLP (C) No. 884 of 2020), Civil Appeal No. 965 of 2022 (@ SLP (C) No. 885 of 2020), Civil Appeal No. 966 of 2022 (@ SLP (C) No. 886 of 2020), Civil Appeal No. 967 of 2022 (@ SLP (C) No. 897 of 2020), Civil Appeal No. 968 of 2022 (@ SLP (C) No. 898 of 2020), Civil Appeal No. 969 of 2022 (@ SLP (C) No. 899 of 2020), Civil Appeal No. 970 of 2022 (@ SLP (C) No. 900 of 2020), Civil Appeal No. 971 of 2022 (@ SLP (C) No. 1038 of 2020), Civil Appeal No. 972 of 2022 (@ SLP (C) No. 2006 of 2020), Civil Appeal No. 973 of 2022 (@ SLP (C) No. 2007 of 2020), Civil Appeal No. 974 of 2022 (@ SLP (C) No. 2009 of 2020), Civil Appeal No. 975 of 2022 (@ SLP (C) No. 2010 of 2020), Civil Appeal No. 976 of 2022 (@ SLP (C) No. 2012 of 2020), Civil Appeal No. 977 of 2022 (@ SLP (C) No. 2652 of 2020), Civil Appeal No. 978 of 2022 (@ SLP (C) No. 2653 of 2020), Civil Appeal No. 979 of 2022 (@ SLP (C) No. 2669 of 2020), Civil Appeal No. 980 of 2022 (@ SLP (C) No. 3002 of 2020), Civil Appeal No. 981 of 2022 (@ SLP (C) No. 3443 of 2020), Civil Appeal No. 982 of 2022 (@ SLP (C) No. 3444 of 2020), Civil Appeal No. 983 of 2022 (@ SLP (C) No. 3445 of 2020), Civil Appeal No. 984 of 2022 (@ SLP (C) No. 3450 of 2020), Civil Appeal No. 985 of 2022 (@ SLP (C) No. 3451 of 2020), Civil Appeal No. 986 of 2022 (@ SLP (C) No. 3452 of 2020), Civil Appeal No. 987 of 2022 (@ SLP (C) No. 3453 of 2020), Civil Appeal No. 988 of 2022 (@ SLP (C) No. 3454 of 2020), Civil Appeal No. 989 of 2022 (@ SLP (C) No. 3455 of 2020), Civil Appeal No. 990 of 2022 (@ SLP (C) No. 3456 of 2020), Civil Appeal No. 991 of 2022 (@ SLP (C) No. 3457 of 2020), Civil Appeal No. 992 of 2022 (@ SLP (C) No. 3458 of 2020), Civil Appeal No. 993 of 2022 (@ SLP (C) No. 3459 of 2020), Civil Appeal No. 994 of 2022 (@ SLP (C) No. 4295 of 2020), Civil Appeal No. 995 of 2022 (@ SLP (C) No. 4368 of 2020), Civil Appeal No. 996 of 2022 (@ SLP (C) No. 4380 of 2020), Civil Appeal No. 997 of 2022 (@ SLP (C) No. 4580 of 2020), Civil Appeal No. 998 of 2022 (@ SLP (C) No. 4633 of 2020), Civil Appeal No. 999 of 2022 (@ SLP (C) No. 4634 of 2020), Civil Appeal No. 1000 of 2022 (@ SLP (C) No. 4637 of 2020), Civil Appeal No. 1001 of 2022 (@ SLP (C) No. 4642 of 2020), Civil Appeal No. 1002 of 2022 (@ SLP (C) No. 4939 of 2020), Civil Appeal No. 1003 of 2022 (@ SLP (C) No. 5113 of 2020), Civil Appeal No. 1004 of 2022 (@ SLP (C) No. 5141 of 2020), Civil Appeal No. 1005 of 2022 (@ SLP (C) No. 5310 of 2020), Civil Appeal No. 1006 of 2022 (@ SLP (C) No. 5311 of 2020), Civil Appeal No. 1007 of 2022 (@ SLP (C) No. 6531 of 2020), Civil Appeal No. 1008 of 2022 (@ SLP (C) No. 6670 of 2020), Civil Appeal No. 1009 of 2022 (@ SLP (C) No. 6680 of 2020), Civil Appeal No. 1010 of 2022 (@ SLP (C) No. 7080 of 2020), Civil Appeal No. 1011 of 2022 (@ SLP (C) No. 7776 of 2020), Civil Appeal No. 1012 of 2022 (@ SLP (C) No. 7777 of 2020), Civil Appeal No. 1013 of 2022 (@ SLP (C) No. 7778 of 2020), Civil Appeal No. 1014 of 2022 (@ SLP (C) No. 7892 of 2020), Civil Appeal No. 1015 of 2022 (@ SLP (C) No. 7893 of 2020), Civil Appeal No. 1016 of 2022 (@ SLP (C) No. 7894 of 2020), Civil Appeal No. 1017 of 2022 (@ SLP (C) No. 7895 of 2020), Civil Appeal No. 1018 of 2022 (@ SLP (C) No. 12286 of 2020), Civil Appeal No. 1019 of 2022 (@ SLP (C) No. 12287 of 2020), Civil Appeal No. 1020 of 2022 (@ SLP (C) No. 12296 of 2020), Civil Appeal No. 1021 of 2022 (@ SLP (C) No. 12304 of 2020), Civil Appeal No. 1022 of 2022 (@ SLP (C) No. 14049 of 2020), Civil Appeal No. 1023 of 2022 (@ SLP (C) No. 15107 of 2020), Civil Appeal No. 1024 of 2022 (@ SLP (C) No. 15108 of 2020), Civil Appeal No. 1025 of 2022 (@ SLP (C) No. 15109 of 2020) and Civil Appeal No. 1026 of 2022 (@ SLP (C) No. 15568 of 2020)
Decided On : 06-04-2023
Income Tax Act, 1961 – Section 153C – Whether amendment brought to Section 153C of Income Tax Act, 1961 vide Finance Act, 2015 would be applicable to searches conducted under Section 132 of Act, 1961 before 01.06.2015, i.e., date of amendment – Amendment brought to Section 153C of Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under Section 132 of Act, 1961 before 01.06.2015, i.e., date of amendment – Object and purpose of Section 153C is to address persons other than searched person – Amendment by substitution has effect of wiping earlier provision from statute book and replacing it with amended provision as if unamended provision never existed – Courts, while interpreting machinery provisions of a taxing statute, must give effect to its manifest purpose by construing it in such a manner so as to effectuate object and purpose of statute – Any interpretation, which may frustrate very object and purpose of Act / Statute shall be avoided by Court. (Paras 10.4,10.6, 10.8 and 11)
Result : Appeals allowed.
JUDGMENT
M.R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 02.04.2019 passed by the High Court of Gujarat in Special Civil Application No. 18777 of 2018 and other connected matters, as well as the impugned judgment(s) and order(s) passed by the High Court of Gujarat in other special civil applications relying upon its earlier decision in the aforesaid case, whereby the High Court has quashed the notice under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as “Act, 1961”) issued to the respondent – assessee - respondents herein and set aside consequent Assessment Orders (where assessment stood completed) by holding that Section 153C of the Act, 1961 (as amended by Finance Act, 2015) would not apply to searches under Section 132 of the Act, 1961 initiated before the date of amendment, the Revenue has preferred the present appeals.
2. At the outset, it is required to be noted that the question of law that arises for the consideration of this Court is :-
Whether amendment brought to Section 153C of the Income Tax Act, 1961 vide Finance Act, 2015 would be applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, i.e., the date of amendment?
3. For the sake of convenience, the Civil Appeal arising out of the impugned judgment and order passed by the High Court in Special Civil Application No. 12825 of 2018 is considered and treated as the lead matter and the facts in the said writ petition are narrated, which in nutshell are as under:-
3.1 The original writ petitioner, an individual filed his Return of Income for the Assessment Year (A.Y.) 2012-13 on 11.09.2012 declaring total income of Rs. 44,73,820/- as business income from a partnership firm and other income. A search came to be conducted on various premises of H.N. Safal Group on 04.09.2013. A panchnama came to be prepared on 07.09.2013. On the basis of the seized material, the Assessing Officer initiated proceedings against the assessee under Section 153C of the Act, 1961 by issuing a notice dated 08.02.2018.
3.2 The assessee filed his reply dated 01.05.2018 and also submitted his return of income. Vide letter dated 14.5.2018, the Assessing Officer furnished the satisfaction note recorded by him and also attached therewith the satisfaction of the Assessing Officer of the searched person. From the satisfaction recorded, though it was found that no document belonging to the original writ petitioner - assessee was found during the course of search, however, a hard-disk was seized, which contained an excel sheet with the data of the computer of the searched person, wherein there were references to the petitioner’s name. On receiving the details, the original writ petitioner raised objections to the proceedings under Section 153C of the Act, 1961 contending, inter alia, that on the basis of the excel sheet data of the computer of the searched person wherein there were only references to the original writ petitioner’s name, the Assessing Officer could not have initiated proceedings against him under Section 153C of the Act, 1961, inasmuch as the condition precedent for invoking Section 153C of the Act as it stood on the date of the search, namely, that the Assessing Officer should be satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned “belongs or belong to” the person other than the searched person, was not satisfied. It was also contended that for the purpose of initiating action under Section 153C of the Act, 1961, independent satisfaction has to be recorded, by the Assessing Officer of the searched person as well as by the Assessing Officer of the person other than the searched person. It was submitted that, however, on a perusal of the satisfaction note recorded by the Assessing Officer of the original writ petitioner, it was evident that the Assessing Officer had merely reproduced the satisfaction of t
(1) Amendment brought to Section 153C of Income Tax Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted under Section 132 of Act, 1961 before 01.06.2015, i.e., date of amendmen....
Satisfaction note u/s 153C invalid if it fails to explicitly state seized materials belonging to assessee have bearing on total income determination; proceedings and assessments quashed as bad in law....
For non-searched persons under s.153C, deemed search date is when jurisdictional AO receives seized material; block assessment years computed from that date. AY 2017-18 fell in s.153C block, renderin....
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