The Delhi High Court has held that notice issued under Section 153C of the Income Tax Act, 1961 without granting the opportunity to the assessee for objection is not valid.
A search and survey action was carried out against entities going by the name Moser Baer Group and Hindustan Power Group and some private individuals i.e., Mr Praveen Kakkar, Mr Rajender Miglani, Mr Lalit Chhallani and others.
According to the respondents/revenue, the reassessment proceedings against Kamal Nath, the petitioner were triggered, as a result of incriminating material found in the search and survey action carried out on the aforementioned entities and private individuals.
The respondents/revenue passed an order under Section 127 of the Act transferring the petitioner’s cases from ITO, Ward 32(1), Kolkata (Respondent No.2) to DCIT, Central Circle 19, Delhi (Respondent No.1. It was evident that a notice for the very same AY under Section 153C of the Act was issued by respondent no.1.
The petitioner challenged the order and, ultimately, lost the battle concerning the transfer of his cases. The Supreme Court via order dated 13.03.2023, dismissed the Special Leave Petition (SLP) preferred by the petitioner.
Section 153C of the Income Tax Act provides that where a search is conducted on a person and undisclosed assets/documents indicating undisclosed income are found as belonging to or about “other person” other than, searched person, then in that case, proceedings u/s 153C would be undertaken against the ‘other person’.
It was evident that the petitioner was furnished the satisfaction note concerning AY 2020-21 only on 26.03.2023. The satisfaction note was furnished after the writ petitions were filed, and, therefore, it does not form a part of the record presently made available to us, the Division Bench observed.
It was also noted that the petitioner wishes to be given an opportunity for filing objections concerning the satisfaction note furnished to him on 26.03.2023, about AY 2020-21.
A two-judge bench comprising Justice Rajiv Shakdher and Justice Tara Vitasta Ganju disposed of the writ petitions by directing the concerned officer to grant a hearing to the petitioner and/or to his authorized representative and shall issue a notice, on this behalf, which will set forth the date and time of the hearing.
Further, the court directed the petitioner to file his objections within two weeks and the concerned officer will, thereafter, fix a date and time according to the hearing vis-à-vis the said satisfaction note.
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