Assessment u/s 143(3) r.w.s. 153C of the Income Tax Act

The Income Tax Appellate Tribunal has allowed appeals filed by assessees, quashing assessment proceedings initiated under Section 153C of the Income Tax Act. The tribunal found that the assessing officer failed to record satisfaction that the materials found during a search belonged to the assessees, rendering the initiation of proceedings legally invalid. Consequently, the orders passed by the tax authorities for the assessment years in question have been annulled.

IN THE INCOME TAX APPELLATE TRIBUNAL
“C’’BENCH: BANGALORE
 

BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT
AND
SHRI B.R. BASKARAN, ACCOUNTANT MEMBER

ITA No.926/Bang/2015
AssessmentYear: 2010-11

M/s. Arshad Ispat
Khan Building, College Road
Behind HDFC Bank
Hospet 583 201
PAN NO :AAPFM8139B

APPELLANT

vs

Deputy Commissioner of
Income-tax
Central Circle 2(3)
Bangalore

RESPONDENT

ITA No.928 & 929/Bang/2015
Assessment Year: 2008-09 & 2010-11

Sri K. Asghar Khan
Beside College Ground
College Road
Hospet 583 201
PAN NO : ANJPK6608A

APPELLANT

vs

Deputy Commissioner of
Income-tax
Central Circle 2(3)

Bangalore

RESPONDENT

ITA No.930 & 931/Bang/2015
Assessment Year: 2009-10 & 2010-11

Appellant by : Shri V. Srinivasan, A.R.
Respondent by : Shri Dilip, Junior Standing Counsel for
Department
 

Date of Hearing : 29.07.2021
Date of Pronouncement : 30.07.2021
 

O R D E R

The appeals filed by the respective assessees are directed against the orders passed by Ld. CIT(A)-11, Bengaluru in their respective hands and they relate to the assessment years mentioned in the caption. In all these appeals, theseassessees have challenged the validity of initiation of proceedings u/s 153C of the Income-tax Act,1961 ['the Act' for short]. Accordingly, all these appeals were heard on the above said preliminary issue only.

2. In order to appreciate the contentions of the assessee, we extract below the provisions of sec.153C, which are relevant for the years under consideration, since this provision has been amended often.

3. It is the contention of these assessees that the assessing officer has not recorded satisfaction that the materials etc found during the course of search belong to them. In order to appreciate this contention of the assessees, we extract below the satisfaction recorded in the hands of theses assessees. The revenue has furnished copies of satisfaction recorded in the cases of M/s Arshad Exports and Sri K Asgar Khan.

4. In view of the foregoing discussions, we are of the view that the initiation of proceedings u/s 153C of the Act in the instant cases is bad in law. Accordingly, we quash the orders passed by the tax authorities in the hands of the assessees herein for the years under consideration.

5. In the result, all the appeals of the assessees are treated as allowed.
Order pronounced in the open court on 30th Jul, 2021.

Please find attached the enclosed file for the full judgement.