BHUPINDER SINGH KAPUR vs. INCOME TAX OFFICER AND ANOTHER

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CWP/25294/2024HC Punjab & HaryanaPHHC01130176202406 November 2024Bench: MR. JUSTICE SANJEEV PRAKASH SHARMA,MR. JUSTICE SANJAY VASHISTH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petitions. Regarding the first objection concerning the timing of the satisfaction note, the Court noted that while the petitioner raised objections before the Assessing Officer (AO), the satisfaction note was prepared on 31.10.2023, and the notice under section 153C was issued to the petitioner on 30.03.2024. The Court observed that the assessment proceedings against the searched person were completed in September 2022 under section 158BC (now 153A). The Court found that the satisfaction note was prepared by the AO of the searched person on 07.06.2023 and transmitted to the concerned AO who drew his satisfaction note on 31.10.2023, after the notice was issued to the petitioner. The Court held that the satisfaction note was prepared after the assessment proceedings against the searched person were completed, but it did not agree that the same cannot be read to mean that it has to be done within a particular period. The Court emphasized that the AO must look into all documents and pass a reasoned order before issuing a satisfaction note, and some time should be allowed for this process, which cannot be a mechanical process. The Court left it open for the petitioner to raise the objection regarding the delay in preparing the satisfaction note if so required. Regarding the second objection concerning the period of limitation beyond six years, the Court noted that the petitioner had not taken this objection before the concerned AO. Therefore, the Court did not delve into this issue, stating that the petitioner did not avail the opportunity to raise it before the AO. The Court concluded that there was no jurisdictional error and dismissed the petitions.

What were the facts?

The petitioner, Bhupinder Singh Kapur, filed writ petitions challenging notices dated 30.03.2024 under section 153C and notices dated 23.03.2024 under section 142(1) of the Income Tax Act, 1961. The petitioner contended that these notices were issued without jurisdiction. A search under section 132(1) was conducted on 28.01.2021, and assessment proceedings were completed under section 158BC (now 153A) against the searched person. The petitioner argued that the satisfaction note for initiating proceedings under section 153C was recorded belatedly, more than one year after the assessment of the searched person was completed, and that the proceedings for Assessment Years 2015-16, 2016-17, 2017-18 fell beyond the six-year limitation period. The Revenue contended that the satisfaction note was prepared timely and the proceedings were valid.

What were the issues?

1. Whether the notices issued under section 153C and 142(1) of the Income Tax Act, 1961, were without jurisdiction, specifically concerning the timing of the satisfaction note and the period of limitation. Assessee's Arguments: - The satisfaction note for initiating proceedings under section 153C was prepared belatedly, more than one year after the assessment proceedings against the searched person were completed, which is contrary to the directions in Circular No. 24/2015 and the judgment in CIT vs. Calcutta Knitwear (2014) 362 ITR 673 (SC). - Proceedings for Assessment Years 2015-16, 2016-17, and 2017-18 are beyond the six-year limitation period as per the judgment in CIT vs. Jasjit Singh (2023) 458 ITR 43 (SC) and should not be continued. - The notices were issued without jurisdiction. Revenue's Arguments: - The Revenue did not explicitly record arguments on the timing of the satisfaction note or the limitation period in the judgment. However, the court's findings suggest the Revenue implicitly defended the validity of the notices and proceedings.

Which sections of the Income-tax Act were involved?

Section 132,Section 142(1),Section 153A,Section 153C,Section 158BC

AI-generated summary — verify with the full judgment below

CWP-25294-202 111+ 107, 108

IN TH BHUPINDER INCOME TA CORAM: H

H Present: M M

f SANJEEV P

1.

The pe 30.03.2 1961 (‘t the Act 2. Learned 132(1) proceed 24 (O&M) Page 1 of 5 8, 109, 110, 112 and 113 HE HIGH COURT OF PUNJA CHANDIGAR

R SINGH KAPUR Vs.

AX OFFICER AND ANOTHER **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Rana Gurtej Singh, Advocate Mr. Nikhil Goyal, Advocate for t Mr. Yogesh Putney, Sr. Standing Mr. Vaibhav Gupta, Standing Co for the respondents/Revenue. **** RAKASH SHARMA, J.(Oral) etitioner by way of present pet 024 issued to him under section the Act’) and the notices dated 23 on the ground that the same have d counsel for the petitioner subm of the Act was conducted on dings were completed under sectio AB AND HARYANA AT RH CWP-25294-2024(O&M) Along with CWP-25252-2024(O&M) CWP-25256-2024(O&M) CWP-25280-2024(O&M) CWP-25287-2024(O&M) CWP-25316-2024(O&M) CWP-26261-2024 (O&M) Date of Decision: 06.11.2024 . . . . Petitioner . . . . Respondents NJEEV PRAKASH SHARMA NJAY VASHISTH e with the petitioner(s). g Counsel with ounsel ) titions assails the notices dated n 153C of the Income Tax Act, 3.08.2024 under section 142(1) of e been issued without jurisdiction. mits that a search under section 28.01.2021 and the assessment on 158BC (now section 153A) of

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CWP-25294-202 the Act proceed issuing 3. Learned wherein judgme Knitwea note un 4. Learned Hon’ble person a p 1 u a s 5. Learned AO on proceed same is Suprem against 6. Learned initiated 24 (O&M) Page 2 of 5 t against the searched person, an dings have been initiated against notices under section 153C of the d counsel relies on the circular N n the Ministry of Finance issu ent passed in Commissioner of ars (2014) 362 ITR 673 (SC), rel nder section 158BD/153C of the A d counsel submits that as per the s e Supreme Court, the satisfaction at any of the following stages: “(a) at the time of or alon proceedings against the searched 158BC of the Act; or (b) in the course of the a under section 158BC of the Act; or (c) immediately after the a are completed under section 158 searched person.”

d counsel submits that as the satis 31.10.2023, which is more than dings against the concerned searc s highly belated and is not in tune me Court, and such proceedings the petitioner and the same deserv d counsel has further argued t d for Assessment Year 2015-1 nd after more than one year, the the petitioner on 30.03.2024 by e Act. No.24/2015 issued on 31.12.2015 ued directions in tune with the of Income-tax III vs. Calcutta lating to recording of satisfaction Act. said circular and directions of the n could be prepared for any other ng with the initiation of d person under section assessment proceedings assessment proceedings 8BC of the Act of the sfaction note was prepared by the an one year after the assessment ched person were completed, the e with the directions issued by the ought not had been pressed as ve to be withdrawn. that the proceedings have been 6, 2016-17, 2017-18 in CWP-

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CWP-25294-202 25316-2 which f ought n the Sup Singh (2 7. With re of the submitt Act bef the obje the Act The oth has not therefor in issuin 8. We fin assessm section person. person the doc transmi satisfac petition that im 24 (O&M) Page 3 of 5 2024, CWP-26261-2024, and fall beyond the period of six year not be allowed to be continued. H preme Court in the case of Comm (2023) 458 ITR 43 (SC). egard to the aforesaid two objecti petitioner in CWP-25294-2024 ted an objection relating to the n fore the concerned Assessing Off ection relating to delay in issuanc , and of satisfaction note being pr her objection relating to the perio t been taken by the petitioner, a re passed an order addressing to h ng of notice after the satisfaction n nd that after the search was ment proceedings were complet 158BC (now section 153A) o The concerned Assessing Offi drew a satisfaction note of initia cuments seized as against the itted the documents to the con tion note on 31.10.2023, wherea ner under section 153C of the Ac mmediately after the assessmen CWP-25294-2024 respectively rs, and therefore the proceedings He relies on judgment passed by missioner of Inxome-tax vs. Jasjit ions, we have examined the case and find that the petitioner had notice under section 153C of the fficer (AO) wherein he has taken e of notice under section 153C of repared after a period of one year. od of limitation beyond six years and the concerned authority has his objections relating to the delay note was prepared. conducted on 28.01.2021, the ted in September, 2022 under of the Act against the searched ficer (AO) of the said searched ating proceedings on the basis of petitioner on 07.06.2023 and ncerned AO who also drew his after the notice was issued to the ct on 30.03.2024. Thus, we find nt proceedings were completed

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CWP-25294-202 against months words ‘ the obs No.24/2 has to b importa all the conside to the au 9. In view satisfac 10. The ot regard t of six y under: r s th b o b o 11. Thus, t conside 24 (O&M) Page 4 of 5 the searched person under sectio , the satisfaction notice was prep ‘immediately after the assessmen ervations of the Hon’ble Suprem 2015 issued on 31.12.2015 canno be done within a day or two or w ant is that before AO issues a sat documents and pass a reaso ering various aspects, certain time uthorities too, and it cannot be a m w thereto, we do not agree that th tion note and proceeding further a ther argument raised by learned to the 1st proviso to section 153C years is concerned, we find that 1st “Provided that in case of reference to the date of initiatio section 132 or making of requisitio he second proviso to sub-section ( be construed as reference to the dat of account or documents or assets by the Assessing Officer having other person.”

there are four different circumsta eration for calculation of the per on 153A of the Act, within nine pared by the concerned AO. The nt proceedings’ as mentioned in me Court and noted in the circular ot be read to mean that the same within a particular period. What is tisfaction note, he must look into oned order. For that purpose, e should be allowed to be granted mechanical process. here is any delay in preparing the against the petitioner. d counsel for the petitioner with C of the Act relating to the period t proviso to section 153C reads as such other person, the on of the search under on under section 132A in (1) of section 153A shall te of receiving the books s seized or requisitioned jurisdiction over such ances which are to be taken into riod. Since the petitioner has not

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CWP-25294-202 taken an the peti if so re himself AO had 12. We fur are com issued, matter. which c him. 13. The wr required noted th the peti 14. Thus, t 15. All pen

November 06, Mohit goyal 1. Whethe 2. Whethe 24 (O&M) Page 5 of 5 ny such objection before the con itioner to raise the said objection quired, and we need not delve o f did not take up the said issue b d no opportunity to pass any order rther observe that the proceeding mprehensive in nature, and the ought to take all the objections an It cannot be said that they are can affect the day to day functioni rit petition, in our opinion, at th d to be entertained except on jur hat there is no jurisdictional error tions. the petitions are accordingly dism nding applications also stand dis

(SANJ , 2024 r speaking/reasoned?

Y r reportable?

Y ncerned AO, we leave it open for at the relevant time as and when, on the said issue as the petitioner efore the concerned AO, and the r on the said aspect. gs under section 153C of the Act person against whom notice is nd wait for a final decision in the in any manner of such a nature ing of the petitioner and prejudice his stage would therefore not be risdictional issue. Since we have r, we need not further delve with issed. posed of. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

r , r e t s e e e e e h MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document

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