P. Sathyanarayanan v. Asstt. CIT

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The Tax Publishers2013 TaxPub(DT) 1519 (Chen-Trib) : (2013) 052 (II) ITCL 0066 Income Tax Act, 1961 --Search and seizure--Notice under section 153CRecording of satisfaction vis-a-vis validity of notice--A search and seizure action was carried out on residential and business premises of assessee's father and on basis of seized material found assessing officer issued notice under section 153C, read with section 153A, to assessee. In compliance with notice under section 153C assessee filed return and assessing officer completed assessment. However, assessee contended that assessing officer had not recorded satisfaction in respect of searched person as well as assessee and as such impugned notice was not valid and assessment was to be annulled. *Held* Assessee's contention was to be accepted. In view of absence of recording of satisfaction in case of searched person as well as assessee implied notice issue under section 153C was not valid. A perusal of the order sheet recording itself, clearly shows that the assessing officer when he made the recording was categorical in his view that the reasons recorded is no pre-condition for action under section 153C and the points noted above are for the sake of ready reference and appropriate action. Once the assessing officer himself has accepted that the recording of reasons is not a pre-condition for action under section 153C and has accepted that the points are noted for the sake of ready reference and appropriate action, obviously cannot be treated as reasons recorded. A reading of the provisions of section 153C clearly shows that it is in pari materia with the provisions of section 158BD. While interpreting the provisions of section 158BD in the case of Manish Maheshwari, more specifically the satisfaction of the assessing officer, the Hon'ble Supreme Court has categorically held that the satisfaction is to be recorded. Admittedly, the assessing officer in the present case is the same as that of searched person also. The Revenue has not been able to show any recording of satisfaction either in the case of searched person or in the case of the present assessee and consequently in view of the principles laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari, the notice issued under section 153C read with section 153A is liable to be held as invalid. Income Tax Act, 1961, Section 153C read with Section 132, 153A Income Tax Act, 1961 --Search and seizure --Notice under section 153CAddition for low house hold withdrawal--Consequent upon search and seizure carried out at assessee's father case, on basis of seized material of assessee, notice under section 153C read with section 153A was issued and on basis of return filed by assessee addition was made by assessing officer for low household withdrawal. Assessee contended that assessee was staying with joint family and drawings of all families would be have to considered. *Held :* Assessee's contention was to be accepted and withdrawal of all families members should be considered which were more than estimated made by assessing officer. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 1519 (Chen-Trib) : (2013) 052 (II) ITCL 0066

Income Tax Act, 1961

--Search and seizure--Notice under section 153CRecording of satisfaction vis-a-vis validity of notice--A search and seizure action was carried out on residential and business premises of assessee's father and on basis of seized material found assessing officer issued notice under section 153C, read with section 153A, to assessee. In compliance with notice under section 153C assessee filed return and assessing officer completed assessment. However, assessee contended that assessing officer had not recorded satisfaction in respect of searched person as well as assessee and as such impugned notice was not valid and assessment was to be annulled. Held Assessee's contention was to be accepted. In view of absence of recording of satisfaction in case of searched person as well as assessee implied notice issue under section 153C was not valid.

A perusal of the order sheet recording itself, clearly shows that the assessing officer when he made the recording was categorical in his view that the reasons recorded is no pre-condition for action under section 153C and the points noted above are for the sake of ready reference and appropriate action. Once the assessing officer himself has accepted that the recording of reasons is not a pre-condition for action under section 153C and has accepted that the points are noted for the sake of ready reference and appropriate action, obviously cannot be treated as reasons recorded. A reading of the provisions of section 153C clearly shows that it is in pari materia with the provisions of section 158BD. While interpreting the provisions of section 158BD in the case of Manish Maheshwari, more specifically the satisfaction of the assessing officer, the Hon'ble Supreme Court has categorically held that the satisfaction is to be recorded. Admittedly, the assessing officer in the present case is the same as that of searched person also. The Revenue has not been able to show any recording of satisfaction either in the case of searched person or in the case of the present assessee and consequently in view of the principles laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari, the notice issued under section 153C read with section 153A is liable to be held as invalid.

Income Tax Act, 1961, Section 153C read with Section 132, 153A

Income Tax Act, 1961

--Search and seizure --Notice under section 153CAddition for low house hold withdrawal--Consequent upon search and seizure carried out at assessee's father case, on basis of seized material of assessee, notice under section 153C read with section 153A was issued and on basis of return filed by assessee addition was made by assessing officer for low household withdrawal. Assessee contended that assessee was staying with joint family and drawings of all families would be have to considered. Held : Assessee's contention was to be accepted and withdrawal of all families members should be considered which were more than estimated made by assessing officer.