KALUNDRE METALIKS PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE AND ANR

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WP/4001/2021HC BombayHCBM01026351202110 August 2021Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE ABHAY AHUJA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to grant any relief in the writ petition. The Court stated that the Assessing Officer may provide copies of the satisfaction notes if, according to him, it is legally required to do so. However, the Court held that if the Assessing Officer proceeds to pass an order without complying with the provisions of Section 153C of the Income Tax Act, 1961, it is open to the petitioner to challenge that order in accordance with the law. The Court explicitly kept open all rights and contentions of the petitioner. The operative direction was to dismiss the petition, leaving the petitioner to pursue remedies against any future order passed by the AO.

What were the facts?

The petitioner, Kalundre Metaliks Private Limited, filed a writ petition before the Bombay High Court. The petitioner's grievance was that the Assessing Officer (AO) of a searched party failed to record satisfaction that seized money, bullion, valuable articles, or documents belonged to a third party (the petitioner) before handing them over to the petitioner's jurisdictional AO. Furthermore, the petitioner contended that the jurisdictional AO should also record satisfaction that these items have a bearing on the petitioner's total income for the relevant assessment year before proceeding under Section 153A of the Income Tax Act, 1961. The petitioner also stated that they had sought copies of these satisfaction notes through communications and RTI applications but had not received them. They sought a stay on notices issued under Section 153C of the Act until these documents were provided.

What were the issues?

1. Whether the Assessing Officer of the searched party is required to record satisfaction that seized items belong to a third party before transferring them to the third party's jurisdictional AO, and if so, whether this satisfaction note must be provided to the third party. (Question of law and fact, concerning Section 153C of the Income Tax Act, 1961). 2. Whether the jurisdictional Assessing Officer of the third party must record satisfaction that seized items have a bearing on the third party's total income before proceeding under Section 153A, and if so, whether this satisfaction note must be provided to the third party. (Question of law and fact, concerning Section 153A and 153C of the Income Tax Act, 1961). Assessee's contentions: The petitioner argued that the satisfaction notes recorded by both the AO of the searched party and the jurisdictional AO of the petitioner are mandatory prerequisites for proceedings under Sections 153C and 153A, respectively. They further contended that these satisfaction notes should be provided to the petitioner before any further proceedings are taken against them. The petitioner relied on the procedural requirements stipulated in Sections 153C and 153A of the Act. Revenue's contentions: The judgment does not record specific contentions from the respondents (Assistant Commissioner of Income Tax and another).

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A

AI-generated summary — verify with the full judgment below

1/2 28.WP-4001-2021.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4001 OF 2021 Kalundre Metaliks Private Limited ….Petitioner V/s. Assistant Commissioner of Income Tax Central Circle - 2 and Anr. ….Respondents ---- Mr. Devendra M. Jain for petitioner. Mr. Sham V. Walve for respondents. ----

CORAM : K.R.SHRIRAM, & ABHAY AHUJA, JJ

DATED : 10th AUGUST 2021 P.C. : 1 Heard Mr. Jain. The entire grievance of petitioner in this case is that in terms of Section 153C of the Income Tax Act, 1961 (the Act), the Assessing Officer of the searched party has to record his satisfaction that any money, bullion or valuable article or any books of account/ documents seized/requisitioned during the course of search belongs to another person(third party). This has to be done before handing over the offending goods/documents to the Assessing Officer having jurisdiction over the third party. Thereafter, the Assessing Officer having jurisdiction over the third party shall then record his satisfaction that the articles, jewellery, books of accounts/documents received by him have a bearing to determine total income of other person, i.e., third party (like petitioner) for the relevant assessment year. This has to be done before proceeding further under Gauri Gaekwad GAURI AMIT GAEKWAD Digitally signed by GAURI AMIT GAEKWAD Date: 2021.08.12 13:48:24 +0530

2/2 28.WP-4001-2021.doc Section 153A of the Act. Further it is the grievance of petitioner that such satisfaction note should be handed over to petitioner before taking further proceedings. 2 Mr. Jain states that petitioner has addressed communications and also sought information under RTI seeking copies of the satisfactions recorded but the same have not been provided. Mr. Jain states that until that is provided, the Court should stay the operation of the notices issued under Section 153C of the Act. 3 We are not inclined to grant any relief in the petition. The Assessing Officer may provide copy of the satisfactions recorded, if according to him in law it is required to be given and if he still passes an order without complying with the provisions of Section 153C of the Act, it is open to petitioner to challenge that order in accordance with law. 4 Keeping open all rights and contentions of petitioner, petition dismissed. (ABHAY AHUJA, J.) (K.R. SHRIRAM, J.) Gauri Gaekwad

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