DNH Spinners Private Limited. Vs DCIT (Bombay High Court)
Bombay High Court held that Court cannot exercise its discretionary jurisdiction to restrain income tax officers from proceedings with assessment proceedings where huge unaccounted income in accommodation entry has been detected.
Facts- A search action u/s. 132 of the Act was initiated in the case of Alok Kumar Agarwal, Ankit Agarwal, M/s. Alankit Limited and M/s. Alankit Assignments Limited, Delhi. During the course of the assessment proceedings u/s. 153A of Alankit Group, materials/documents which has bearing on deciding the total income of the petitioner were found and, therefore, satisfaction note were forwarded for necessary action in the case of the petitioner u/s. 153C of the Act.
Accordingly, notice dated 28 February 2024 u/s. 153C came to be issued upon the petitioner. Petitioner objected the same as satisfaction note, despite being requested, was not provided. However, the respondents passed an order rejecting the petitioner’s objections. Thus, the petitioner is challenging the issue of notice under Section 153C of the Act dated 28 February 2024 and the order rejecting the objection dated 28 December 2024.
Conclusion- Held that in our view, it would be premature to presume that the assessment order passed under Section 153C would be against the petitioner. If during the assessment proceedings, and based on the submissions made by the petitioner, if the assessing officer is convinced on the merits of the case, then no prejudice would be caused to the petitioner. However, if the assessment proceedings are intricated at this stage, it would undoubtedly preclude the assessing officer from investigating. This is the case of search and seizure where huge unaccounted income in accommodation entry has been detected. In our view, this Court cannot exercise its discretionary jurisdiction in such type of cases by which the officer should be prevented to proceed with such type of assessment proceedings.
