2015 (8) TMI 982 - HC - Income Tax

Assessment u/s 153C - Held that - It may be noted that in the present case satisfaction note was prepared by the AO on 25th February 2010. Consequently, the finding of the ITAT in the present case that the assessment made under Section 143(1) of the Act for the AY 2009-10 was not valid, calls for no interference. No substantial question of law arises in the facts and circumstances of the present case.

Summary

Issues:
1. Validity of assessment under Section 143(1) for the Assessment Year 2009-10.
2. Interpretation of the first proviso to Section 153C (1) of the Income Tax Act, 1961.
3. Application of precedents such as SSP Aviation Ltd. v. Deputy Commissioner of Income Tax.
4. Circular dated 31st March 2014 issued by the CBDT regarding Section 153C.

Analysis:
1. The appeal by the Revenue challenged the order of the Income Tax Appellate Tribunal (ITAT) regarding the assessment for the Assessment Year 2009-10 under Section 143(3) of the Income Tax Act, treating it as the year of search and reopening assessments for previous years.

2. The main question raised was related to the first proviso to Section 153C (1) of the Act. The ITAT relied on the judgment in SSP Aviation Ltd. v. Deputy Commissioner of Income Tax, which clarified the abatement of proceedings for the searched person and the other person involved. The judgment emphasized that for the other person, the date of receiving seized material determines the abatement of proceedings.

3. Despite reference to another decision pending in the court, the judgment in SSP Aviation Ltd. was considered conclusive. Additionally, a circular issued by the CBDT provided guidelines on Section 153C, emphasizing the role of the Assessing Officer of the other person upon receiving seized material and satisfaction note from the AO of the searched person.

4. The satisfaction note in the present case was prepared on 25th February 2010, leading to the ITAT's finding that the assessment under Section 143(1) for the AY 2009-10 was not valid. Consequently, the Court dismissed the appeal, stating no substantial question of law arose in the circumstances.

In conclusion, the judgment clarified the application of the first proviso to Section 153C, emphasizing the significance of the date of receiving seized material for determining the abatement of proceedings for the other person involved. The decision in SSP Aviation Ltd. was deemed conclusive, supported by guidelines from the CBDT circular. The Court's dismissal of the appeal affirmed the ITAT's finding regarding the validity of the assessment under Section 143(1) for the AY 2009-10.