Income Tax Notice Challenge Dismissed; Court Directs Use of Alternative Statutory Remedy for Procedural Concerns.

The HC dismissed the writ petition challenging the issuance of a notice under Section 153C of the Income Tax Act, 1961. The petitioner argued procedural irregularity due to the non-supply of recorded satisfaction by the Assessing Officer. However, the HC emphasized the availability of an alternative statutory remedy under Section 246A, directing the petitioner to file an appeal with the Appellate Authority to address the issues raised. The court underscored the importance of pursuing statutory remedies before seeking judicial intervention.

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Issues Involved:
1. Issuance of notice under Section 153C of the Income Tax Act, 1961.
2. Requirement of recording satisfaction by Assessing Officer.
3. Procedural irregularity in the issuance of notice.
4. Availability of alternative statutory remedy of filing an appeal under Section 246A of the Act.

Analysis:

1. Issuance of notice under Section 153C of the Income Tax Act, 1961:
The petitioner challenged the issuance of a notice under Section 153C of the Income Tax Act, 1961, by the respondent authority. The petitioner sought relief to produce complete records, quash the impugned notice, and set aside the order passed by the respondent. The petitioner argued that the notice was issued without providing the satisfaction recorded by the Assessing Officer who searched the third person, as required by law.

2. Requirement of recording satisfaction by Assessing Officer:
The petitioner contended that under Section 153C of the Act, it is mandatory for the Assessing Officer to record satisfaction that the seized items belong to a person other than the one searched. The petitioner claimed that the satisfaction recorded by the Assessing Officer who searched the third person was not provided, leading to procedural irregularity in the issuance of the notice. The petitioner relied on relevant case law to support the argument that the satisfaction must be supplied to the person affected by the notice.

3. Procedural irregularity in the issuance of notice:
The petitioner highlighted the procedural irregularity in the non-supplying of satisfaction recorded by the Assessing Officer who searched the third person. The petitioner argued that this irregularity allowed for the writ petition to be entertained by the Court, despite the availability of an alternative remedy of filing an appeal before the Appellate Authority. The petitioner emphasized the importance of following procedural requirements in issuing notices under the Act.

4. Availability of alternative statutory remedy of filing an appeal under Section 246A of the Act:
The respondent argued that since an assessment order had already been passed, the petitioner should challenge the order by filing an appeal under Section 246A of the Act. The respondent cited a case where the Court held that if an assessment order is passed during the pendency of a writ petition challenging a notice, the assessee must file an appeal. The Court dismissed the writ petition, stating that the petitioner had an efficacious alternative statutory remedy of filing an appeal, which should be pursued to address the grounds raised.

In conclusion, the Court dismissed the writ petition, emphasizing the availability of an alternative statutory remedy for the petitioner to challenge the assessment order. The Court directed the petitioner to approach the Appellate Authority to raise all grounds available and have them considered in accordance with the law.

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