DCIT Vs Subramaniam Kathiresan (ITAT Chennai)
153C Beyond Six Years Needs ₹50 Lakh Asset Satisfaction — Missing Jurisdictional Fact Quashes Entire Assessment
Chennai ITAT dismissed Revenue’s appeal and upheld CIT(A)’s order quashing the assessment of Subramaniam Kathiresan for AY 2014-15, holding that the assumption of jurisdiction u/s 153C itself was bad in law. Search was conducted on a third party on 05-02-2020 and the satisfaction note u/s 153C was recorded only on 18-11-2022, making AY 2014-15 the 9th year for the purpose of section 153A/153C.
The Tribunal held that once the case falls beyond six years, the additional jurisdictional condition introduced by the Finance Act, 2017 becomes mandatory — namely, the AO must record satisfaction that income represented in the form of an “asset” of ₹50 lakh or more has escaped assessment. A plain reading of the satisfaction note showed no whisper of any such asset, nor any quantification meeting the ₹50-lakh threshold. The note merely referred to alleged cash loans and repayments attracting penalty u/s 271D/271E, which was held insufficient to trigger extended jurisdiction.
Relying on binding precedents including Sinhgad Technical Education Society (SC), Goldstone Cements Ltd. (Gauhati HC), RRJ Securities Ltd. (Delhi HC) and Kabul Chawla (Delhi HC), the Tribunal reiterated that jurisdictional facts must exist and be evident from the satisfaction note itself and cannot be supplied later. Since AY 2014-15 was a completed (unabated) assessment, and the statutory pre-conditions for reopening the 7th–10th year were absent, the entire proceedings were held void.
Accordingly, the 153C notice and consequential assessment were quashed, CIT(A)’s order was confirmed, and the Revenue’s appeal was dismissed, rendering all issues on merits purely academic
FULL TEXT OF THE ORDER OF ITAT CHENNAI
