The assessee sought to challenge the notices issued on 7.3.2023 u/s. 153C of the Act by filing writs mainly on following counts :
- a) there had been inordinate delay in issuing impugned notices as the search, on which basis notices were issued-took place in April, 2019.
- b) assessments which were proposed to be undertaken for AYs 2014-15, 2015-16 and 2016-17 would be barred by the period of limitation as raised by virtue of the First Proviso to Section 153C of the Act.
- c) in the absence of an explicit reference to the incriminating material or asset that may have been discovered year wise and a failure to establish a connection between such material and the total income of each of the six AYs’, invalidates the initiation of action under Section 153C of the Act.
- d) The AO is obliged to draw a Satisfaction Note independently in respect of each of the assessment years and the AO having recorded consolidated satisfaction, notices issued were bad in law.
Rejecting the contentions of the assessee, the High Court held as under :
- the material gathered in the course of the search would have empowered and enabled the AO to undertake an assessment for six assessment years immediately preceding the assessment year pertaining to the previous year in which the search was conducted and would also extend to the four additional assessment years which would stand included by virtue of Explanation 1 to Section 153A of the Act.
- A composite Satisfaction Note would suffice the requirements of Section 153C of the Act provided it embodied details of the material gathered in the course of the search and pertaining to the AYs forming part of the block as a whole.
- As a long as proceedings are initiated within a reasonable period from the closure of assessment of the searched person, a failure to take “immediate” action would not be fatal to the assessment.
- Petitions have been filed at the fag end of the limitation period stipulated u/s. 153B of the Act although the related material had been handed over to the Petitioner way back in June 2023.
- Therefore, there is no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution.
- However and whether the asserted delay in commencement of proceedings would be fatal to the assessment itself is a question that we leave was left open to be urged at an appropriate juncture.(AY. 2014-15 too 2016-17)