Commissioner Of Income Tax vs. Smt.Mansi Moolchandani

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ITA/103/2009HC Madhya Pradesh10 August 2015Bench: HON'BLE THE CHIEF JUSTICE1 pages
For Petitioner: Sanjeev Tuli
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that recording of satisfaction before issuing a notice under Section 158-BD of the Income Tax Act is absolutely necessary. The reasoning was based on the established principle that such satisfaction is mandatory in proceedings under Section 153. The Tribunal further noted that Section 153-C is 'para material' with Section 158-BD, implying that the procedural requirements for both sections are similar. Since the Revenue had not recorded the necessary satisfaction before issuing the notice under Section 158-BD, the Tribunal found that interference in the matter was not called for. Consequently, the appeal filed by the Revenue was dismissed. No issues were expressly left undecided.

What were the facts?

This Indian ITAT judgment concerns an appeal filed by the Revenue against an order that presumably deleted an addition made to the assessee's income. The appeal was filed under Section 260-A of the Income Tax Act. The Revenue filed an application for condoning the delay in filing the appeal, which was allowed by the Tribunal. The core of the appeal revolves around the procedural requirement of recording satisfaction before issuing a notice under Section 158-BD of the Income Tax Act. The judgment references a previous order by a co-ordinate bench of the Tribunal dated July 10, 2015, in a batch of appeals (ITA Nos. 44, 45, 48, 50, 53, 54, and 57 of 2011) that dealt with a similar issue under Section 153-C.

What were the issues?

1. Whether, in the context of proceedings under Section 158-BD of the Income Tax Act, it is mandatory to record satisfaction before issuing a notice, and if so, is a notice issued without such satisfaction justified? The Revenue contended that the issuance of a notice under Section 158-BD without recording satisfaction is not justified. The Revenue relied on the principle that recording of satisfaction is absolutely necessary in proceedings under Section 153, and that Section 153-C is 'para material' with Section 158-BD. The judgment does not record any specific arguments from the assessee's side regarding this issue.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 158-BD,Section 153-C,Section 153

AI-generated summary — verify with the full judgment below

ITA NO. 103/2009 10-08-2015.

Shri Sanjay Lal, learned counsel for the appellant.

Shri A.P.Shrivastava, learned counsel for the respondent.

They are heard on I.A.No.10078/2014, an application for condoning the delay in filing of this appeal under Section 260-A of the Income Tax Act.

Keeping in view the reasons indicated in the application, the same is allowed.

The only question that is canvassed in this appeal by the revenue under Section 260-A is as to whether before issuing notice under section 158-BD satisfaction is to be recorded and whether issuance of the notice without recording of satisfaction is justified or not ?

This question with regard to recording of satisfaction while issuing notice under Section 153-C has been considered and while holding that recording of satisfaction in a proceeding under Section 153 if is absolutely necessary, a finding has also been recorded that the provisions of Section 153-C are para material with Section 158-BD.

In view of the aforesaid and looking to the order passed in appeals filed by the revenue under Section 260-A by a co-ORDINATE Bench of this court on 10th July, 2015 in I.T.A.Nos. 44, 45, 48, 50, 53, 54 and 57 of 2011, we hold that recording of satisfaction before issuing notice under Section 153-BD was absolutely necessary and this having not been done, the interference in the matter is not called for.

Appeal stands dismissed, accordingly.

(RAJENDRA MENON) (SUSHIL KUMAR GUPTA) JUDGE

JUDGE

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