The Chennai bench Income Tax Appellate Tribunal ( ITAT ), rejected the assessment order under Section 143(3) of the Income Tax Act, 1961, due to oversight and typographical error, as the satisfaction note was not provided.
A search and seizure operation was carried out under Section 132 of the Income Tax Act, 1961 ( “the Act” ) on July 25, 2019, by the Investigation Wing concerning M/s. Sakthi Ferro Alloys India Private Limited, M/s. Sakthi Steel Industries Ltd., and Sri Kannaiah Naidu Anandh. During this operation, a survey was conducted at the premises of M/s. Prakash Ferrous Industries Private Limited, the assessee in question, resulting in the seizure of various items.
The Assessing Officer of M/s. Sakthi Ferro Alloys India Private Limited, M/s. Sakthi Steel Industries Ltd., and Sri Kannaiah Naidu Anandh, after recording satisfaction under Section 153C of the Income Tax Act, 1961, noted that the seized materials related to business transactions of the assessee for multiple financial years spanning from 2013-14 to 2019-20. Subsequently, proceedings were initiated under Section 153C of the Income Tax Act, 1961, on September 9, 2021, for the assessment year under appeal.
The assessee had originally filed their income return on November 3, 2020, declaring a total income of ₹2,15,49,290/-. Following the initiation of proceedings under Section 153C, a notice was issued to the assessee on September 9, 2021. In response, the assessee requested to treat the original return of income as the return filed in response to the notice under Section 153C of the Income Tax Act, 1961. Furthermore, a notice under Section 142(1) of the Income Tax Act, 1961, was issued on September 21, 2021, along with a show-cause notice on September 23, 2021.
The next objections of the assessee are that no satisfaction prescribed under section 153C of the Act was provided to the respondent assessee and also erred in framing assessment order dated 29.09.2021 under section 144 of the Income Tax Act, 1961, in contravention of the provisions of Section 144 of the Income Tax Act, 1961.
The counsel for revenue Nilay Baran Som submitted that in case of search and seizure, issue of notice under Section 143(2) of the Income Tax Act, 1961, was not mandatory for finalization of assessment under Section 153A of the Income Tax Act, 1961,
Respectfully following the decision of the Delhi High Court in the case of Ashok Chaddha ( supra ), the bench considered the opinion that the objection of the assessee was not liable to be maintained. Accordingly, the objection of the assessee was rejected.
Furthermore the bench observed that the next objections of the assessee are that no satisfaction prescribed under Section 153C of the Income Tax Act, 1961, was provided to the respondent assessee and also erred in framing assessment order dated 29.09.2021 under Section 144 of the Income Tax Act, 1961, in contravention of the provisions of Section 144 of the Income Tax Act, 1961,
The two member bench of the tribunal comprising Manoj Kumar Agarwal ( Accountant member ) and V. Durga Rao ( Judicial member ) observed that the remand report from the Assessing Officer refuted the objections raised by the assessee concerning the satisfaction note’s receipt and the typographical error in the order.
In the result, the appeal filed by the Revenue as well as Cross Objection of the assessee are dismissed.
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