Assessments Quashed: Lack of Jurisdiction, Premature Satisfaction Note

The Tribunal allowed the assessee's appeals, quashing the assessment orders for the relevant years. It held that the Assessing Officer lacked jurisdiction to issue the notice under Section 153C as the satisfaction note was recorded prematurely. The Tribunal found the assessment proceedings invalid due to the AO's failure to meet mandatory requirements. As a result, all appeals were allowed based on the decision in ITA No. 347/JP/2022.

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Issues Involved:
1. Assumption of jurisdiction under Section 153C of the Income Tax Act.
2. Validity of assessment proceedings under Section 153C.
3. Interpretation of the judgment of the Income Tax Settlement Commission.
4. Non-action against the searched person and its implications on the assessee.

Detailed Analysis:

1. Assumption of Jurisdiction under Section 153C:
The primary issue revolves around the assumption of jurisdiction by the Assessing Officer (AO) under Section 153C. The AO issued a notice under Section 153C based on documents seized during a search operation. The appellant contended that the satisfaction note was recorded before the AO had jurisdiction over the case, making it invalid. The Tribunal found that the satisfaction note dated 01-08-2019 was recorded before the AO had jurisdiction, which was obtained on 02-09-2019. The Tribunal concurred with the appellant's argument, stating that in an online process, no notice can be issued by any officer other than the jurisdictional AO. Therefore, the AO did not have the authority to issue the notice under Section 153C, rendering the proceedings invalid.

2. Validity of Assessment Proceedings under Section 153C:
The Tribunal also examined whether the assessment proceedings under Section 153C were valid. The appellant argued that the AO did not bring any evidence to prove that cash payments were made by the appellant, and the documents seized did not explicitly indicate such payments. The Tribunal noted that the AO recorded the satisfaction note without having jurisdiction and issued the notice under Section 153C based on this unauthorized satisfaction note. The Tribunal found that the AO did not comply with the mandatory requirements of Section 153C, as the satisfaction note was recorded without proper jurisdiction. Consequently, the Tribunal quashed the assessment orders for the relevant years.

3. Interpretation of the Judgment of the Income Tax Settlement Commission:
The appellant argued that the CIT(A) erred in interpreting the judgment of the Income Tax Settlement Commission in the case of the searched person, Shri Baldeep Goyal. The appellant contended that the CIT(A) selectively relied on portions of the judgment that suited her and ignored other parts favorable to the appellant. The Tribunal did not explicitly address this issue in detail but focused on the jurisdictional aspect and the validity of the assessment proceedings.

4. Non-action against the Searched Person and its Implications on the Assessee:
The appellant argued that the case against the assessee could not be taken up when no action was taken against the searched person, Shri Baldeep Goyal, on whose basis the proceedings under Section 153C were initiated. The Tribunal did not delve deeply into this argument but quashed the assessment orders based on the jurisdictional defect and the invalid satisfaction note.

Conclusion:
The Tribunal allowed the appeals of the assessee, quashing the assessment orders for the relevant years. The Tribunal held that the AO did not have proper jurisdiction to issue the notice under Section 153C and that the satisfaction note was recorded without authority. Consequently, the assessment proceedings were deemed invalid. The decision in ITA No. 347/JP/2022 was applied mutatis mutandis to the other appeals, resulting in all appeals being allowed.

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