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2019 Supreme(Guj) 614
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
HARSHA DEVANI, BHARGAV D. KARIA, JJ.
Anil Kumar Gopikishan Agrawal – Appellant
Versus
Assistant Commissioner of Income Tax, Circle 3(2) – Respondent
R/Special Civil Application Nos.12825, 12829, 12832, 17489, 17490, 19074, 19078, 19079, 19083, 19214, 19215, 19216, 19221, 19222, 19223, 19674, 19675, 20108, 19116, 19119, 19121, 20128, 20129, 20143, 20145, 20146, 20149, 20151, 20152, 20154, 20604, 20629, 20632, 12849, 18611, 19654, 19657, 19658, 19659, 19661, 19899, 19900, 19902, 18346, 18362, 19869, 19239, 19868, 20236, 20246, 20442, 20530, 20537, 20539, 20610, 20081, 19841, 16419, 16421, 16425, 16426, 16427, 16782, 16786, 16800, 16801, 16821, 17771, 17788, 17789, 17790, 17791, 17793, 17796, 17797, 18270, 18271, 18272, 18273, 18274, 18712, 18773, 18777, 19232, 19234, 19236, 19321, 19323, 19325, 19647, 19676, 19844, 19871, 20221, 20228, 20241, 20244, 20245, 20272, 20276, 20825, 20828 and 20830 of 2018
Decided On : 02-04-2019
For the Appellant :Hardik Vora, Sudhir Mehta, Shailee Mehta, Advocates, S.N. Soparkar, Senior Advocate, B.S. Soparkar, Tushar Hemani, Vaibhavi Parikh, M.J. Shah, Advocates, Mihir Joshi, Senior Advocate, Darshan Gandhi, Learned Advocate, Ketan Shah, S.N. Divatia, Darshan Patel and Ankit Talsania, Advocates
For the Respondents:Mauna M. Bhatt, Advocate
Headnote:
Income Tax Act, 1961 - Section 153C - Constitution of India ,1950 - Article 226 – Petition issued by respondent-Assessing Officer to respective petitioners are subject matter of challenge - In a few cases pursuant to impugned notices assessment orders have been passed - Though assessment orders were passed prior to filing of writ petitions it appears that same were not communicated to petitioners at relevant point of time and petitioners were not aware of same at time of filing respective petitions – Nonetheless questions of law involved in all petitions whether at stage of notice Act or at stage of assessment orders are common court had taken up petitions for hearing together and has decided them by this common judgment - Petitioner and individual had filed his return of income for assessment year declaring total income of as business income of Gujarat Foundries and other income - A search came to be conducted on various premises of came to be prepared - On basis of seized material Assessing Officer initiated proceedings against petitioner Act by issuing a notice - Independent satisfaction has to be recorded by Assessing Officer of searched person Assessing Officer of person other than searched person however on a perusal of satisfaction note recorded by Assessing Officer of petitioner is clear that has merely reproduced satisfaction of Assessing Officer of searched person and has not recorded requisite satisfaction as contemplated – Held, Courts have held that provisions of Act are substantially similar provisions of Act and therefore above guidelines of Honble SC apply to proceedings IT Act for purposes of assessment of income of other than searched person view has been accepted by CBDT – Court decision of Supreme Court would also be applicable insofar as recording of satisfaction as contemplated Act by Assessing Officer of person searched is concerned - In present case admittedly satisfaction has not been recorded at time of or along with initiation of proceedings against searched person Act - In case of Group searched persons approached Settlement Commission and hence there was no assessment Act - Proceedings before Settlement Commission came to be concluded by an order Act - Order came to be received by Assessing Officer of searched person on said Assessing Officer recorded satisfaction on that is after a period of more than eight months from date of receipt of order of Settlement Commission - In opinion of this court satisfaction can by no stretch of imagination be stated to have been recorded immediately after assessment proceedings are over in case of searched person - Not only that Assessing Officer of searched person handed over record to Assessing Officer of other person on said Assessing Officer recorded his satisfaction only that is after a period of more than nine months from of receipt of record - Therefore satisfaction note does not appear to have been prepared at any of stages at which could it have been prepared in terms of above decision of Supreme Court – Petition allowed (Para 20)
JUDGMENT :
Harsha Devani, J.
1. In all these petitions under article 226 of the Constitution of India, notices under section 153C of the Income Tax Act, 1961 (hereinafter referred to as "the Act") issued by the respondent-Assessing Officer to the respective petitioners are subject matter of challenge. In a few cases, pursuant to the impugned notices assessment orders have been passed. Though such assessment orders were passed prior to the filing of the writ petitions, it appears that the same were not communicated to the petitioners at the relevant point of time and hence, the petitioners were not aware of the same at the time of filing the respective petitions. Nonetheless, since the questions of law involved in all the petitions whether at the stage of notice under section 153C of the Act or at the stage of assessment orders are common, the court had taken up the petitions for hearing together and has decided them by this common judgment.
2. Since the facts and contentions in all the petitions are more or less common, for the sake of convenience, in case of H.N. Safal Group, reference is made to the facts as referred to in Special Civil Application No. 12825 of 2018.
2.1. The petitioner therein, and individual, had filed his return of income for assessment year 2012-13 on 11.9.2012 declaring total income of Rs. 44,73,820/- as business income of M/s. Gujarat Foundries (Partnership Firm) and other income. A search came to be conducted on various premises of H.N. Safal Group on 4.9.2013, wherein a panchnama came to be prepared on 7.9.2013. On the basis of the seized material, the Assessing Officer initiated proceedings against the petitioner under section 153C of the Act by issuing a notice dated 8.2.2018.
2.2. In response thereto, the petitioner filed his reply dated 1.5.2018 and 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, it was found that no document belonging to the petitioner was found during the course of search. However, a hard-disc was seized in excel sheet data of the computer of the searched person, wherein there was reference of the petitioner's name.
2.3. On receiving the details, the petitioner raised objections to the proceedings under section 153C of the Act with detailed submissions, inter alia, contending that on the basis of the excel sheet data of the computer of the searched person wherein there was only reference to the petitioner's name, the Assessing Officer could not have initiated proceedings against the petitioner under section 153C of the Act inasmuch as the condition precedent for invoking section 153C of the Act as it stood on the date of the search, viz. 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 further contended that for the purpose of initiating action under section 153C of the Act, independent satisfaction has to be recorded, by the Assessing Officer of the searched person as well as the Assessing Officer of the person other than the searched person; however, on a perusal of the satisfaction note recorded by the Assessing Officer of the petitioner, it is clear that he has merely reproduced the satisfaction of the Assessing Officer of the searched person and has not recorded the requisite satisfaction as contemplated under section 153C of the Act.
2.4. By an order dated 23.7.2018, the Assessing Officer rejected the objections filed by the petitioner. Being aggrieved, the petitioner has approached this court by way of present petition challenging the impugned notice dated 8.2.2018 issued by the Assessing Officer under section 153C of the Act for assessment year 2012-13.
2A. In
