Assessment for AY 2009-10 u/s 153C Declared Invalid for Jurisdiction; ITAT Allows Appeal Due to Procedural Lapse.

The ITAT allowed the appeal, ruling that the assessment for AY 2009-10 under section 153C of the Income-tax Act, 1961, was beyond jurisdiction. The Tribunal found that the notice was issued after the satisfaction was recorded for AY 2016-17, making it jurisdictionally invalid for AY 2009-10. The decision was guided by judicial precedents, including the Delhi HC's clarification on the necessity of recording satisfaction under section 153C, leading to the assessment being set aside.

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Issues:
Jurisdiction under section 153C of the Income-tax Act, 1961 for Assessment Year 2009-10.

Analysis:

The appeal was filed against the order of the Commissioner of Income-tax Appeals-3 for Assessment Year 2009-10. The appellant argued that the assessment proceedings for the impugned year were initiated beyond the jurisdiction under section 153C. The appellant relied on various decisions to support this argument. The search in the case of Sunstar Group was conducted on 19.12.2013, and the notice under section 153C was issued on 20.01.2016. The appellant contended that the satisfaction was recorded by the Assessing Officer for AY 2016-17, and therefore, the notice for AY 2009-10 was beyond jurisdiction. The appellant cited judicial precedents to support their case.

The Departmental Representative for the Revenue relied on the orders of the authorities below. The Tribunal observed that the notice under section 153C was issued after the satisfaction was recorded by the Assessing Officer, making the relevant searched assessment year AY 2016-17. As per judicial precedence, the notice for AY 2009-10 was held to be beyond jurisdiction. The Tribunal referred to a decision of the Hon'ble Delhi High Court in the case of CIT-14 vs. Shree Jasjit Singh, which clarified the jurisdictional aspect under section 153C. The Court emphasized the importance of recording satisfaction and maintaining institutional memory. The Tribunal followed the decision and set aside the assessment made for AY 2009-10.

In conclusion, the Tribunal allowed the appeal filed by the assessee, noting that the assessment for AY 2009-10 made under section 153C was beyond jurisdiction. The Tribunal's decision was based on the judicial precedent and the clarification provided by the Hon'ble Delhi High Court regarding the recording of satisfaction under section 153C. The assessment for the impugned year was set aside based on the lack of jurisdiction.

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