Paras Chandreshbhai Koticha Vs ITO (Gujarat High Court)
Gujarat High Court held that reopening of assessment u/s. 147 of the Income Tax Act solely on the basis of material found by AO of searched person without satisfaction note as prescribed under section 153C is untenable in law.
Facts- The present group of petitions arise from the proceedings/ notices issued to the respective petitioners under Section 148 of the Income-tax Act, 1961, reopening the assessment under Section 147 of the Act. The issue raised in the instant writ petitions arises prior to the promulgation of the Finance Act, 2021, by which the provisions of Sections 147 to 149 of the Act were substituted with new Sections 147, 148, 148A and 149 of the Act. It also removed Sections 153A to 153C of the Act and merged them under Section 147 of the Act. The proceedings under Sections 147/148 of the Act stem from search actions conducted under Section 132 of the Act or from the requisitions made under Section 132A of the Act.
Conclusion- Held that in the absence of any satisfaction note recorded by the Assessing Officer of the searched person, the jurisdictional Assessing Officer of the other person cannot assume jurisdiction under Section 153C of the Act solely on the basis of material sent to him by the Assessing Officer of the searched person. In other words, the “other person” cannot be subjected to assessment/ reassessment under Section 153C of the Act on the material received by him sans a satisfaction note; hence, such an approach would be illegal, without jurisdiction, and liable to be quashed.
