Case Law Details
Vivil Investments Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Notice issued u/s 153C was invalid in case of non-recording of separate satisfaction note even if AO of searched and other person was same
Conclusion: Notice under section 153C was to be issued with recording of separate satisfaction note even if AO of searched person and the other person, i.e., assessee was one and the same,therefore, in absence of the same, any order passed, in pursuance of such notice was void ab-initio and liable to be quashed.
Held: Assessee had questioned validity of assessment order passed u/s 143(3) r.w.s. 153C , on the ground that AO having jurisdiction over searched party and the assessee both, initiated section 153C proceedings in assessee’s case on the basis of documents found during search in case of searched party, however, without recording separate satisfaction in case of ‘other person’, i.e., assessee which vitiated whole proceedings, consequently any order passed, in pursuance of such notice was void ab-initio and liable to be quashed. It was held Supreme Court in case of CIT v. M/s. Calcutta Knitwears, Ludhiana (2014) 362 ITR 673 (SC) : 2014 Tax Pub(DT) 1547 (SC) clarified the position of law that recording of separate satisfaction was pre-requisite to issue notice under section 153C and this legal position had been accepted by the department and accordingly CBDT issued a Circular No. 24/2015. In the present case, in absence a valid satisfaction note recorded by the AO of the searched person and AO of the assessee, the notice issued u/s 153C was bad in law and consequently, whole proceedings including assessment order passed u/s 143(3) r.w.s. 153C was void ab initio and liable to be quashed.
FULL TEXT OF THE ITAT JUDGEMENT
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