KSJ Infrastructure Pvt Ltd Vs DCIT (ITAT Chennai)
The Chennai ITAT ruled that the notice issued by the Assessing Officer (AO) under section 153C of the Income Tax Act for the subject assessment year was barred by limitation and void ab initio. This decision stemmed from a case where a search operation conducted on certain entities yielded incriminating material related to the assessee. However, since the notice was issued beyond the stipulated timeframe, it was deemed void.
The ITAT emphasized that for proceedings under section 153C, the AO of the searched person must first record satisfaction that the seized material pertains to the total income of another person, and then hand over relevant documents to the AO of that person. Without this satisfaction note, the transfer of documents cannot occur.
In this particular case, the AO of the searched person had recorded satisfaction regarding the seized material before issuing the notice under section 153C. The ITAT clarified that for the second proviso to section 153A(1), which deals with the time limit for assessment in search cases, the reference to the date of initiation of search should be construed as the date when the AO of the other person receives the relevant documents.
