2022 (3) TMI 1566 - HC - Income Tax

Assessment u/s 153C - As argued jurisdictional AO issued notice u/s 153C based on the information received from other AO, who searched other person - After receipt of notice, when petitioner submitted an application for supply of satisfaction recorded by the other Assessing Officer who searched third person, jurisdictional AO has forwarded reason / satisfaction recorded by him before issuing notice u/s 153C but grievance of petitioner is that jurisdictional AO has not supplied him satisfaction recorded by AO, who searched third person. HELD THAT - When this Court put pin-pointed question to petitioner that under which provision, satisfaction recorded by AO who searched third person is to be supplied to Assessee, he submits that under the scheme of Act, Assessee is required to know the basis and reasons, on which, notice has been issued. Undisputedly, when Assessee has submitted an application before Assessing Officer, he supplied reasons recorded by him before issuance of notice u/s 153C. At this stage, Petitioner would submit that as per his information, Assessing Officer who searched third person has not recorded the satisfaction. In the opinion of this Court, this appears to be a factual dispute raised by learned counsel for petitioner, which can be very well considered and decided by Appellate Authority. The case laws, petitioner placed reliance are arising of order passed by Appellate Authority in an appeal challenging order of assessment, hence, we are not inclined to entertain this writ petition, particularly when during pendency of this petition, assessment order is already passed by Authority as the petitioner is having efficacious alternate statutory remedy of filing appeal under Section 246A.

Summary

Issues Involved:
1. Issuance of notice under Section 153C of the Income Tax Act, 1961.
2. Requirement of recording satisfaction by Assessing Officer.
3. Procedural irregularity in the issuance of notice.
4. Availability of alternative statutory remedy of filing an appeal under Section 246A of the Act.

Analysis:

1. Issuance of notice under Section 153C of the Income Tax Act, 1961:
The petitioner challenged the issuance of a notice under Section 153C of the Income Tax Act, 1961, by the respondent authority. The petitioner sought relief to produce complete records, quash the impugned notice, and set aside the order passed by the respondent. The petitioner argued that the notice was issued without providing the satisfaction recorded by the Assessing Officer who searched the third person, as required by law.

2. Requirement of recording satisfaction by Assessing Officer:
The petitioner contended that under Section 153C of the Act, it is mandatory for the Assessing Officer to record satisfaction that the seized items belong to a person other than the one searched. The petitioner claimed that the satisfaction recorded by the Assessing Officer who searched the third person was not provided, leading to procedural irregularity in the issuance of the notice. The petitioner relied on relevant case law to support the argument that the satisfaction must be supplied to the person affected by the notice.

3. Procedural irregularity in the issuance of notice:
The petitioner highlighted the procedural irregularity in the non-supplying of satisfaction recorded by the Assessing Officer who searched the third person. The petitioner argued that this irregularity allowed for the writ petition to be entertained by the Court, despite the availability of an alternative remedy of filing an appeal before the Appellate Authority. The petitioner emphasized the importance of following procedural requirements in issuing notices under the Act.

4. Availability of alternative statutory remedy of filing an appeal under Section 246A of the Act:
The respondent argued that since an assessment order had already been passed, the petitioner should challenge the order by filing an appeal under Section 246A of the Act. The respondent cited a case where the Court held that if an assessment order is passed during the pendency of a writ petition challenging a notice, the assessee must file an appeal. The Court dismissed the writ petition, stating that the petitioner had an efficacious alternative statutory remedy of filing an appeal, which should be pursued to address the grounds raised.

In conclusion, the Court dismissed the writ petition, emphasizing the availability of an alternative statutory remedy for the petitioner to challenge the assessment order. The Court directed the petitioner to approach the Appellate Authority to raise all grounds available and have them considered in accordance with the law.