Back
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Sunita Agarwal, Aniruddha P. Mayee, JJ.
Shyamlal Rupchand Parwani – Petitioner
Versus
The Assistant Commissioner Income Tax, Central Circle 1(1)(1) – Respondent
R/Special Civil Application No. 315, 317, 321, 324, 328, 365, 436 of 2024
Decided On : 06-02-2024
Income Tax Act - Challenge to Notice under Section 153C - Summary of Acts and Sections: Section 153C of the Income Tax Act, 1961 (A.Y.2014-15), Section 142(1), Circular No.24 of 2015, CIT vs. Calcutta Knitwears, Commissioner of Income-Tax, Gujarat vs. Vijaybhai N. Chandrani - The court discussed the requirements and guidelines under Section 153C, the necessity of a satisfaction note, and the implications of non-provision of the satisfaction note to the petitioner. The court also referred to the decision of the Apex Court in Calcutta Knitwears and Circular No.24 of 2015 to emphasize the importance of strict compliance with the guidelines and the need for a satisfaction note at various stages of the proceedings.
Fact of the Case:
The petitioner challenged the notice dated 09.06.2022 for the Assessment Year 2014-15 under Section 153C of the Income Tax Act, 1961, as well as the order dated 02.12.2023 and the notice under Section 142(1) dated 11.12.2023. The petitioner contended that the satisfaction note and incriminating material were not provided, and baseless allegations were made without any material foundation.
Finding of the Court:
The court found that the satisfaction note was not initially provided to the petitioner, but it was later served upon the petitioner. The court held that the absence of the satisfaction note did not vitiate the proceedings, and the petitioner's objections could be raised before the Assessing Officer during the assessment proceedings.
Issues: The issues revolved around the provision of the satisfaction note, the necessity of incriminating material, and the jurisdiction of the Assessing Officer in issuing the notice under Section 153C.
Ratio Decidendi: The court emphasized the importance of the satisfaction note and the need for strict compliance with the guidelines and legal provisions under Section 153C. The court also highlighted the petitioner's right to raise objections during the assessment proceedings.
Final Decision: The court disposed of the writ petitions, rejecting the challenge to the notice under Section 153C and the notice under Section 142(1), while allowing the petitioner to raise objections before the Assessing Officer. The court clarified that its observations should not influence the framing of the assessment order.
JUDGMENT :
SUNITA AGARWAL, J.
1. In another set of writ petitions leading being Special Civil Application No. 434 of 2024, arguments were heard on 15.01.2024 and the matter has been kept for orders on 06.02.2024. It is pointed out by Mr. Darshan R. Patel, learned counsel for the petitioners that one writ petition being Special Civil Application No. 436 of 2024 filed by the petitioner herein, namely Shyamlal Rupchand Parwani has been tagged with the aforesaid bunch, though the facts of the said case are somewhat different from the present bunch. It was, therefore, agreed between the parties that since the order has yet not been delivered, Special Civil Application No. 436 of 2024 be also decided with this bunch. We, therefore, direct that the Special Civil Application No. 436 of 2024 be tagged with the present bunch of petitions filed by the same petitioner, namely, Shyamlal Rupchand Parwani arising out of a similar dispute.
2. As the issue raised in the present bunch of writ petitions are identical in nature, they have been heard together and are being decided by this common judgement.
3. The challenge is to the notice dated 09.06.2022 for the Assessment Year 2014-15( in short as A.Y.2014-15”) under Section 153C of the Income Tax Act, 1961 ( in short as “the Act’1961”) as also the order dated 02.12.2023 purporting to be the objection disposal order passed by the respondent No.2. The further challenge is to the notice under Section 142(1) dated 11.12.2023. The prayer is to restrain the respondents from enforcing the compliance of the impugned notice under Section 153C dated 09.06.2022 for A.Y.2014-15.
4. The grounds to challenge the initiation of proceedings under Section 153C of the Act’1961 are that:-
(i) The satisfaction note of the searched person as well as the satisfaction note recorded in the case of the petitioner, have not been provided to the petitioner, though specific request was made by the petitioner vide letter dated 08.08.2022. The entire proceedings leading to the issuance of notice under Section 142, therefore, stands vitiated.
(ii) No incriminating material was found against the petitioner during the search carried out on 15.10.2019.
(iii) Baseless allegations have been made against the petitioner without there being any material before the Assessing Officer to even record the prima facie proof that the seized material has a bearing on the petitioner’s case.
5. Elaborating the above grounds, it was submitted by Mr. Darshan R. Patel, the learned counsel for the assessee that as the satisfaction note admittedly was not provided to the petitioner along with the notice under Section 153C, there was no question of filing of the objection by the petitioner. However, in a mechanical manner, the Assessing Officer had served the copy of the objection disposal order of other persons treating the letter dated 19.10.2023 as the objection of the petitioner to the notice dated 09.06.2022 under Section 153C of the Act’1961.
6. The attention of the Court is invited to the copy of the communication dated 19.10.2023 (at Page ‘29’ of the paper book of Special Civil Application No. 315 of 2024) to demonstrate that in response to the notice under Section 143(2) of the Act’1961 dated 01.08.2022, the petitioner had requested to provide copy of the satisfaction note and other material on the basis of which the proceedings under Section 153C have been initiated. It was contended that though repeated requests were made by the petitioner vide letters dated 06.08.2022 and 19.10.20223, the copy of the satisfaction note and other material have not been provided. The result is that the communication of objection disposal order dated 02.12.2023 is proved to be a mechanical exercise on the part of the Assessing Officer. The submission is that this fact itself shows the approach of the Assessing Officer to implicate the petitioner by any means without there being any material before it to record the prima facie satisfaction that the seized material pe
AI
The main legal point established in the judgment is the significance of the satisfaction note under Section 153C of the Income Tax Act, the need for strict compliance with guidelines, and the petitio....
The court established that unreasonable delays in recording satisfaction notes under Section 153C of the Income Tax Act invalidate subsequent notices, emphasizing the imperative for timely procedural....
Income tax - reopening of the assessment of the assessee under Section 147, whereas the present case arises out of the proceedings initiated and the satisfaction recorded by the Assessing Officer for....
The court affirmed that a combined satisfaction note under Section 153C is valid if it includes sufficient details of incriminating material, and assessments for multiple years are not barred by limi....
The court held that notices under Section 153C are valid despite delays in recording satisfaction, as the extended assessment period allows for ten years from the previous year of the search.
Jurisdictional Assessing Officer must record satisfaction before issuing notices under Section 153C; failure to comply with this requirement may render issued notices invalid.
The court ruled that issued notices and assessment orders under S.153C of the Income Tax Act are valid if the Assessing Authority recorded satisfaction.
The validity of Section 153C proceedings requires the assessing officer's independent application of mind, making assessments void if merely based on copied satisfaction notes.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
