Pramod Subbiahnapalya Venkatpathi Vs DCIT (ITAT Bangalore)
Common Satisfaction Note for Multiple Years Invalid – Separate Satisfaction U/s 153C Required for Each AY: ITAT Bangalore
The ITAT Bangalore held that recording a single consolidated satisfaction note for multiple assessment years is invalid for initiating proceedings u/s 153C, and separate satisfaction must be recorded for each assessment year based on incriminating material.
In the present case, a search was conducted in the premises of a charitable trust and related persons. Based on seized material, the AO issued notices u/s 153C for AYs 2015-16 to 2020-21 to the assessee by recording a common satisfaction note for all the years. Additions were subsequently made including ₹6 lakh treated as unexplained money u/s 69 based on a sale agreement and certain bank transactions.
The assessee challenged the proceedings on the ground that no incriminating material was seized for most of the years and the AO had not recorded year-wise satisfaction linking seized documents to each assessment year.
The Tribunal observed that only a single document relating to one transaction was found, and even that was not in the nature of incriminating material. Further, the AO had recorded a blanket satisfaction note for all assessment years without specifying seized material for each year, which is contrary to law.
Relying on the judgment of the Karnataka High Court in DCIT v. Sunil Kumar Sharma, affirmed by the Supreme Court, the Tribunal held that a separate satisfaction note is mandatory for each assessment year while invoking Section 153C. Since this requirement was not fulfilled, the notice issued u/s 153C and the consequential assessments were held invalid.
Accordingly, the Tribunal quashed the assessment orders for AYs 2015-16 to 2020-21 and allowed all the appeals of the assessee.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
