2022 (12) TMI 886 - HC - Income Tax

Assessment u/s 153C - one or more seized document, books of accounts or asset should belong to the assessee - HELD THAT - A plain reading of the provision of Section 153C of the Act, as it stood at the relevant point in time, would demonstrate that the AO of the searched person i.e. Mr Satya Prakash, should have generated a note that the documents, books of account or assets belonging to the other person had been found. We may also note that Mr Zoheb Hossain has, fairly, put before us the satisfaction note dated 02.02.2012, generated by the AO of the respondent/assessee, which discloses that there is no reference to any material or assets which belonged to the respondent/assessee. For completion of the record, the satisfaction note concerning the respondent/assessee as generated by his AO.

Summary

Issues involved:
Delay in re-filing the appeal, Jurisdiction under Section 153C of the Income Tax Act, 1961, Interpretation of Section 153C, Satisfaction note requirement for initiating proceedings under Section 153C, Applicability of case law in determining jurisdiction.

Analysis:

1. Delay in re-filing the appeal:
An application was filed seeking condonation of a 115-day delay in re-filing the appeal. The delay was condoned based on reasons provided in the application. The application was disposed of accordingly.

2. Jurisdiction under Section 153C of the Income Tax Act, 1961:
The appeal was directed against an order passed by the Income Tax Appellate Tribunal regarding a search conducted on a group of cases. The Assessing Officer issued a notice under Section 153C to the respondent/assessee, directing them to file a return. The assessment order resulted in an addition made by the AO, which was later appealed by the respondent/assessee.

3. Interpretation of Section 153C:
The Commissioner of Income Tax (Appeals) allowed the appeal filed by the respondent/assessee, stating that jurisdiction was assumed based on the association with the searched person, not because any seized documents belonged to the assessee. The Tribunal also dismissed the appeal by the appellant/revenue.

4. Satisfaction note requirement for initiating proceedings under Section 153C:
The Tribunal found that the AO of the searched person did not generate a satisfaction note, which was deemed fatal to the case of the appellant/revenue. Section 153C requires a note that documents, books of account, or assets belonging to the "other person" had been found.

5. Applicability of case law in determining jurisdiction:
The CIT(A) relied on specific judgments to conclude that proceedings under Section 153C required seized documents or assets to belong to the assessee. The Tribunal affirmed this view, leading to the dismissal of the appeal. The appellant's argument, supported by the AO's order, was not sufficient to reverse the decisions made by the lower authorities.

In conclusion, the High Court dismissed the appeal, stating that it did not raise any substantial questions of law. The Court found no grounds to interfere with the order of the Tribunal, emphasizing the importance of satisfying the requirements of Section 153C for initiating proceedings under the Income Tax Act.