2016 (8) TMI 1359 - AT - Income Tax

Assessment u/s 153C - Non recording of satisfaction - Held that - There is no dispute with regard to the fact that proceedings under section 153C are initiated without recording satisfaction. Thus the proceedings initiated under section 153C of the Act are invalid.

Summary

Issues:
Validity of proceedings initiated under section 153C of the Income Tax Act without recording satisfaction.

Analysis:
The appeals by the assessee were against the common order passed by the CIT(A), Guntur for the Assessment Years 2004-05 to 2007-08. The Assessing Officer, post search and seizure operations, issued notices under section 153C of the Act and completed assessments with additions. The assessee challenged the additions confirmed by CIT(A) and also questioned the initiation of proceedings under section 153C, arguing that without recording proper reasons, the assessments are void abinitio. The Ld. D.R. confirmed no satisfaction note was recorded for the relevant years. The counsel for the assessee contended that without recording satisfaction, the Assessing Officer lacks jurisdiction to initiate proceedings, rendering them void abinitio.

The Tribunal examined the submissions and noted that proceedings under section 153C were indeed initiated without recording satisfaction. Referring to a similar case, the Tribunal highlighted that the absence of recorded satisfaction invalidates the proceedings. Citing a judgment where the initiation of proceedings under section 153C was quashed due to lack of recorded satisfaction, the Tribunal held that the proceedings in the present case were also invalid. As a result, the Tribunal allowed the appeals by the assessee, as the proceedings initiated by the Assessing Officer were deemed invalid, eliminating the need to delve into the merits of the additions made.

In conclusion, the Tribunal found the proceedings initiated under section 153C of the Act to be invalid due to the absence of recorded satisfaction by the Assessing Officer. Consequently, the appeals filed by the assessee were allowed, as the invalidity of the proceedings rendered further discussion on the merits of the additions unnecessary.