Kakanatil Abdul Rahiman Siraj Mather Vs ACIT (Kerala High Court)
153C Satisfaction Is Jurisdictional — Kerala HC Sets Aside ITAT Order Remands Cases for Fresh Decision
The Kerala High Court allowed a batch of appeals filed by the Assessee and remitted the matter back to the ITAT, Cochin Bench, holding that the Tribunal failed to properly examine the jurisdictional pre-condition of recording “satisfaction” u/s 153C of the Income-tax Act, 1961.
The assessments for AYs 2010-11 to 2014-15 were framed u/s 153C based on documents seized during a search on a third party. The Assessee contended that no valid satisfaction was recorded either by the AO of the searched person or by the AO having jurisdiction over the Assessee, rendering the entire proceedings void ab initio.
The High Court observed that recording of satisfaction is a foundational requirement under Section 153C and must be examined before entering into the merits of additions made u/s 69. Since the Tribunal had not properly addressed this preliminary jurisdictional issue—particularly whether the AOs of the searched person and the “other person” were the same—the matter required reconsideration.
Accordingly, the impugned ITAT order was set aside and the appeals were remanded to the Tribunal to first decide the issue of jurisdiction under Section 153C and thereafter, if necessary, adjudicate the additions on merits, in accordance with law
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
