Bhupinder Singh Kapur Vs ITO (Supreme Court of India)
The proceedings arose from notices issued to Bhupinder Singh Kapur under Section 153C of the Income Tax Act, 1961, dated 30.03.2024, and notices under Section 142(1) dated 23.08.2024, which were challenged on the ground that they had been issued without jurisdiction. A search under Section 132 had been conducted on 28.01.2021, and assessment proceedings against the searched person were completed under Section 158BC, now Section 153A, in September 2022. The Assessing Officer of the searched person subsequently drew a satisfaction note on 07.06.2023 concerning documents seized in relation to the petitioner and transmitted the documents to the concerned Assessing Officer, who drew his satisfaction note on 31.10.2023. The Section 153C notice was thereafter issued on 30.03.2024.
Before the High Court, the petitioner relied on CBDT Circular No. 24/2015 dated 31.12.2015, issued in the context of the Supreme Court judgment in Commissioner of Income-tax III vs. Calcutta Knitwears (2014) 362 ITR 673 (SC). The petitioner submitted that satisfaction under Section 158BD/153C could be recorded at the time of, or along with, initiation of proceedings against the searched person, during the assessment proceedings, or immediately after completion of those proceedings. Since the satisfaction note in the petitioner’s case was prepared on 31.10.2023, more than one year after completion of the searched person’s assessment proceedings, the petitioner contended that the proceedings were belated. The petitioner also raised an objection concerning the six-year period applicable under the first proviso to Section 153C and relied upon Com Singh (2023) 458 ITR 43 (SC).
The High Court examined the petitioner’s case and noted that the satisfaction note by the Assessing Officer of the searched person had been prepared on 07.06.2023, while the searched person’s assessment proceedings had been completed in September 2022. It held that the satisfaction was prepared within nine months of completion of those proceedings. The High Court observed that the expression “immediately after the assessment proceedings” could not be read as requiring the satisfaction note to be prepared within a day or two or within a specified period. According to the High Court, the Assessing Officer was required to examine the documents and pass a reasoned order, for which some time had to be allowed. It therefore rejected the contention that there was delay in preparing the satisfaction note.
Regarding the six-year limitation objection under the first proviso to Section 153C, the High Court noted that the provision contemplated four different circumstances for calculating the relevant period. Since the petitioner had not raised this objection before the concerned Assessing Officer, the High Court left the issue open for the petitioner to raise, if required, before the appropriate authority. The High Court further observed that Section 153C proceedings were comprehensive and that the person receiving notice ought to raise all objections and await a final decision. It dismissed the writ petitions, while disposing of the pending applications.
The petitioner challenged the High Court’s decision before the Supreme Court of India. After hearing the petitioner’s counsel and examining the materials on record, the Supreme Court stated that it found no reason to interfere with the impugned High Court order. The Special Leave Petition was accordingly dismissed, and pending applications were also disposed of. Thus, the High Court’s dismissal of the writ proceedings remained undisturbed.
Read also HC Judgment in this case: Bhupinder Singh Kapur Vs ITO (Punjab and Haryana High Court)
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Exemption Application is allowed.
2.Having heard the learned counsel appearing for the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court.
3.The Special Leave Petition is, accordingly, dismissed.
4.Pending applications, if any, shall also stand disposed of.
