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.

1. The present writ petition has been filed impugning Exts. P1 to P6 notices under S.153C of the Income Tax Act 1961 (for short, 'IT Act') for the Assessment Years 2015-16 to 2020-21; Exts.P7 to P11 Assessment Orders dated 28.03.2023 for the Assessment Years 2015-16 to 2019-20; and Exts.P12 and P13 Assessment Orders dated 29.03.2023 for the Assessment Years 2020-21 and 2021-2022 whereby the petitioner's total income has been assessed as Rs.92,87,317/-, loss of Rs.33760/-, loss of Rs.35,402/-, loss of Rs.3,25,893/-, loss of Rs.1,23,311/-, Rs.10,00,000/- and Rs.5,10,00,000/- respectively for the Assessment Years from 2015-16 to 2021-22.

2. Learned Counsel for the petitioner submits that the petitioner has approached this Court against the Assessment Orders because the proceedings in issuing the notices under S.153C of the IT Act for the Assessment Years 2015-16 to 2020-21 require them to file return of income for the concerned years on the basis of the provisions of S.153C of the IT Act and that the Assessment Orders for the said Assessment Years in Exts.P7 to P13 are without jurisdiction and against law. Therefore, the petitioner has not approached the Appellate Authority and approached this Court invoking the writ jurisdiction of this Court under Art.226 of the Constitution of India.

2.1. Learned Counsel for the petitioner further submits that the Assessing Officer is required to record satisfaction note before issuing notice under S.153C of the IT Act to a person other than the searched person. Notice issued under S.153C has not mentioned / specified the satisfaction note recorded by the 2nd respondent of the searched person. It is also submitted that the satisfaction notes supplied to the

2.2. Learned Counsel for the petitioner has placed reliance on the judgment of the Bombay High Court in the case of Ashok Commercial Enterprises v. Assistant Commissioner of Income Taxation Central Circle (Judgment dated 21.07.2023 in Writ Petition No.2595/2021 and connected Writ Petitions) in support of his submissions.

3. The petitioner had filed its return of income voluntarily for the Assessment Years up to 2021-22. In respect of Assessment Year 2021-22, a net loss of Rs.6,54,555/- was claimed. A search operation under S.132 of the IT Act was carried out on 23.03.2021 at the business premises as well as the residential premises of Civil Contractor - Sri K N Madhusoodanan Nair, his Company - M/s Mavanal Granites Pvt Ltd and connected entities (Mavanal Group). During the search, certain incriminating documents showing the unaccounted income of Sri K N Madhusoodanan and his concerns about the diversion of business funds to evade taxation were noticed. It was further noticed that by diverting the funds, they had been expending unaccounted payments for investment in landed properties. Based on evidence gathered during the course of the search, the assessments under S.153A of the IT Act were completed in the case of Sri K N Madhusoodanan, his concerns and connected persons.

3.1. In the course of the search under S.132 of the IT Act, a document with the title of 'Palakkad Land' was seized from the residence of Sri K R Unnikrishnan, Accountant at M/s Mavanal Granites Pvt Ltd. This document was a folder containing signed cash receipts of two persons, Mr Salim and Mr Asgar. Sri K R Unnikrishnan, in his sworn statement recorded on 24.03.2021, had stated that Sri K N Madhusoodanan was trying to buy 100 acres of land at Nelliampathy, Palakkad, from M/s South Coast Spices Exports Pvt Ltd (the petitioner), and paid Rs.5 crores, out of which Rs.10 lakhs was by cheque and the balance in cas