Validity of assessment framed u/s 153C - Search conducted at ...

Electronic Records Valid as "Books of Accounts" Pre-Amendment; Unexplained Income Addition to Directors Reassessed.

August 9, 2024

Case Laws     Income Tax     HC

Validity of assessment framed u/s 153C - Search conducted at secret office of searched person - Definition of "Books and Books of Accounts" u/s 2(12A) includes electronic/digital form - Amendment clarificatory, retrospective - Printouts include PDF copies - Information stored in electromagnetic devices like pen drive, hard disk qualified as books of accounts even before amendment. Jurisdictional error invoking Section 153C rejected. Period of limitation - One year from date documents handed over/deemed handed over to assessing officer of other person, i.e., 31.03.2024. Satisfaction notes issued in time. Notices u/s 153C preceded satisfaction notes. No time lag between 31.03.2022 and satisfaction note dates. Incriminating material unearthed. Limitation under third proviso to Section 153B(1) - Twelve months from end of financial year documents handed over/deemed handed over to assessing officer of other person, i.e., 31.03.2023. Initiations against petitioners justified, in time. Transactions with searched person. Single satisfaction note by assessing officer of searched person sufficient. Arguments on limitation fallacious. Validity of scrutiny assessment orders u/s 143(3) - Validly initiated proceedings cannot abate. Orders within stipulated time. Mere same date not jurisdictional error. Addition of unexplained income to directors of company incorrect - Orders quashed, remanded to redo exercise by adding income to petitioner u/s 69A.

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