2021 (10) TMI 292 - HC - Income Tax

Assessment u/s 153A - Need for recording satisfaction - HELD THAT - Investment of the petitioner in the relevant year to the extent of Rs. 80.00 lakhs may be that for some reason the agreement could not be performed and the petitioner may have to resort to lodging of an FIR against the vendor named therein but the aforesaid documents sufficiently reveal that the petitioner intended to acquire an asset worth Rs. 80.00 lakhs in the relevant year and the said asset has escaped assessment. The said assessment/satisfaction of the Assessing Authority may not be correct or justified nonetheless he was possessed of the documents to form an opinion that the income worth over Rs. 50.00 lakhs or above has escaped assessment - not only he was possessed of the relevant documents but has also recorded his satisfaction regarding escapement of assessment to the tune of over Rs. 50.00 lakhs. Accordingly it is not a case where ex facie it can be said that the notice is without jurisdiction. It may be relevant to note that in response to the aforesaid notices the petitioner has already filed revised returns and the matter is pending assessment. Once the petitioner has already filed revised returns he has accepted or acquiesced to the notices and as such is estopped from challenging the same.

Summary

Issues:
Challenge to notices under Section 153A of the Income Tax Act, 1961 for assessment years 2012-13 and 2013-14.

Analysis:
The petitioner challenged the notices issued under Section 153A of the Income Tax Act, 1961, for the assessment years 2012-13 and 2013-14, claiming they were without jurisdiction. The petitioner argued that the Assessing Authority lacked material to form an opinion that income had escaped assessment of Rs. 50.00 lakhs or more, citing the 4th proviso to Section 153A and a Supreme Court decision. Section 153A applies in cases of search where the Assessing Authority must have material indicating income escape of Rs. 50.00 lakhs or more to issue a notice for revised returns. The Assessing Authority must be satisfied based on available material before issuing such a notice.

The Assessing Authority in this case issued notices under Section 153A based on an agreement to sell a piece of land for Rs. 80.00 lakhs, with an advance payment of Rs. 8.00 lakhs made. The petitioner had entered into this agreement, indicating a likely investment of Rs. 80.00 lakhs in the relevant year, even if the agreement was not fulfilled. The documents supported the Assessing Authority's opinion that income worth over Rs. 50.00 lakhs had escaped assessment. Although the Authority's satisfaction may be debatable, he had relevant documents and recorded his opinion on the income escape. The petitioner had already filed revised returns in response to the notices, implying acceptance or acquiescence, barring him from challenging the notices.

Considering the circumstances, the court found no need to exercise discretionary jurisdiction and dismissed the writ petition without costs.