2024 (2) TMI 490 - HC - Income Tax

Validity of Proceedings u/s 153C - manadation of satisfaction note of the AO before proceeding u/s 153C - HELD THAT - We are not in a position to accept the contention of the learned counsel for the petitioner that there was no satisfaction note of the Assessing Officer before proceeding under Section 153C of the Act 1961. It may be noted that the petitioner has filed return in compliance of the notice under Section 142(1) dated 11.12.2023. The notice u/s 153C for the A.Y.2014-15 under challenge is dated 09.06.2022. As the petitioner has approached this Court, in the instant petition, only after issuance of the notice under Section 142(1) dated 11.12.2023 after filing of the return, we do not find it a fit case to interfere at this stage, on the sole ground that the satisfaction note was not provided to the petitioner along with the notice dated 09.06.2022 issued under Section 153C for A.Y. 2014-15 and, as such, the entire proceedings leading to issuance of notice under Section 142(1) dated 11.12.2023 stands vitiated. The points raised by assessee on the plea of lack of jurisdiction of the AO in issuing notice under Section 153C of the Act, can not be appreciated by us, as it could not be demonstrated that no satisfaction note was recorded by the Assessing Officer prior to issuance of the notice under Section 153C of the Act 1961 on 09.06.2022. No merit in the challenge made in the bunch of writ petitions to the notice under Section 153C. The request for stay of the order for a period of four weeks to enable the petitioner to approach the Apex Court is hereby rejected.

Summary

Issues involved:
The challenge to the notice dated 09.06.2022 for the Assessment Year 2014-15 under Section 153C of the Income Tax Act, 1961, the order dated 02.12.2023, and the notice under Section 142(1) dated 11.12.2023.

Summary:
The writ petitions were heard together as the issues raised were identical. The challenge was against the initiation of proceedings under Section 153C of the Income Tax Act, 1961, based on various grounds. The petitioner argued that the satisfaction note and incriminating material were not provided, and baseless allegations were made without evidence.

The petitioner contended that the Assessing Officer failed to provide the satisfaction note despite repeated requests, leading to a mechanical disposal of objections. The petitioner highlighted non-compliance with CBDT guidelines and the importance of the satisfaction note in such proceedings.

The Court noted that while the satisfaction note was not initially provided, it was eventually served after the notice under Section 142(1). The Court found that the petitioner had filed a return after the notice under Section 142(1) and could raise objections during assessment proceedings.

Referring to a previous Apex Court decision, the Court emphasized that the High Court should not interfere at the stage of notice issuance under Section 153C. The Court found no merit in the challenges to the notices and allowed the petitioner to raise objections during assessment proceedings.

The Court clarified that its observations should not influence the Assessing Officer's decision during assessment. The writ petitions were disposed of, and the request for a stay was rejected.

Conclusion:
The Court rejected the challenges to the notices under Section 153C and Section 142(1) but allowed the petitioner to raise objections during assessment proceedings. The Assessing Officer was instructed not to be influenced by the Court's observations, and the writ petitions were finally disposed of.