2016 (10) TMI 549 - HC - Income Tax

Assessment u/s 153C - unexplained payment - whether there was sufficient material to prima facie show that in such handwritten noting in the seized document reference to 1105 was a cash payment by the petitioner to B. Nanji - Held that - This is not a case where the satisfaction recorded by the Assessing Officer of the searched person can be stated to be based on no material. There is thus prima facie material to suggest that incriminating documents seized during the search belonged to the petitioner. The Revenue has for the purpose of brief scrutiny available at this stage led before the Court sufficient material not to interfere with the pending assessments. Facts in all petitions are common. They are therefore not separately recorded or referred.

Issues Involved:
1. Jurisdiction of the Assessing Officer under Section 153C of the Income Tax Act.
2. Validity of the satisfaction note recorded by the Assessing Officer.
3. Existence and relevance of incriminating documents.
4. Premature filing of the writ petition without exhausting alternative remedies.

Detailed Analysis:

1. Jurisdiction of the Assessing Officer under Section 153C:
The petitioner challenged the notice issued under Section 153C of the Income Tax Act, asserting that the respondent authority lacked jurisdiction. The petitioner argued that no satisfaction as required under Section 153C was recorded by the Assessing Officer of the searched person and that no document belonging to the petitioner was seized during the search.

2. Validity of the Satisfaction Note:
The petitioner’s counsel contended that the satisfaction note was not produced and that no document belonging to the petitioner was seized. However, the department's counsel opposed this, presenting that the Assessing Officer of the searched person had recorded a satisfaction note on 28.8.2009, stating that documents belonging to the petitioner were found during the search. The court reviewed the original files and confirmed that the satisfaction note was indeed recorded, thus rejecting the petitioner’s claim that no such note existed.

3. Existence and Relevance of Incriminating Documents:
The petitioner argued that the foundation for issuing the notice was factually incorrect and that no incriminating documents were seized. The court examined the materials, including a computer printout from the books of accounts of the petitioner seized during the search, which showed transactions with B. Nanji Enterprises. The court found that this document and other materials provided sufficient grounds for the Assessing Officer to form a satisfaction that the documents belonged to the petitioner. The court noted that the document in question showed a payment of ?11.45 crores, including a handwritten entry, which was corroborated by other seized documents.

4. Premature Filing of the Writ Petition:
The court referred to Supreme Court judgments in "Commissioner of Income-tax v. Vijaybhai N. Chandrani" and "Commissioner of Income-tax v. Chhabil Dass Agarwal," emphasizing that when an alternative remedy is available, the High Court should not entertain a writ petition. The petitioner should have addressed grievances through the statutory remedy provided under the Act before approaching the High Court. The court concluded that the petitioner prematurely filed the writ petition without exhausting alternative remedies.

Conclusion:
The court dismissed all petitions, concluding that the Assessing Officer had jurisdiction under Section 153C, the satisfaction note was validly recorded, there was prima facie material suggesting that incriminating documents belonged to the petitioner, and the petitioner should have first exhausted alternative remedies before filing the writ petition.

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