Case Law Details
S. R. Trust Vs ACIT (Madras High Court)
Conclusion: Search proceedings had been rightly initiated as assessee had nothing to fear, they could as well place all the materials before AO for consideration and more so, the jurisdictional facts exist for assumption of jurisdiction under Section 153A as well as Section 153C of the Act.
Held: Assessee was a public charitable trust enjoying exemption under the Income Tax Act. It was running a hospital in the name and style of “Meenakshi Mission Hospital and Research Centre (MMHRC)” at Madurai. Search was conducted which yielded certain incriminating material. Since the material related to MMHRC, Madurai, AO was satisfied that the proceedings had to be initiated under Section 153C for the period commencing from the assessment years 2012-13 to 2016-17, against assessee-trust which was running MMHRC. Thereupon the impugned notices under Section 153A was issued to Dr.S.Gurushankar, while the impugned notices dated 04.09.2018 under Section 153C were issued to M/s.S.R.Trust. Thereafter, instead of taking part in the assessment proceedings, assessee-trust invoked the jurisdiction of this Court under Article 226 of the Constitution of India. The writ petitions were admitted and interim stay was also granted on 31.10.2018. To vacate the same, petitions were filed by the assessment authority. It was held that if incriminating material was seized from the personal assistant of the assessee, then constructive possession must be attributed to assessee. It would be against public interest to abort the efforts taken by the department to unearth the escaped income. Thus, the initiation of the impugned action could not be said to be without basis. They were grounded on solid material. In fact, immediately after the seizure of the material, the impugned action was not taken. The officials examined many other persons and statements were also recorded. Only after fully satisfying himself, AO chose to issue the impugned notices. If assessee had nothing to fear, they could as well place all the materials before the assessing authority for consideration. The jurisdictional facts exist for assumption of jurisdiction under Section 153A as well as Section 153C of the Act.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
In these writ petitions, notices issued under Sections 153A and 153C of the Income Tax Act, 1961 are under challenge.
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