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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the notice and assessment framed under section 153C of the Income-tax Act, 1961 were valid when the satisfaction note was recorded after 01.04.2021 and the seized material was not shown to have been received earlier by the Assessing Officer.
Analysis: The appeals arose from search-based assessments of a non-searched person. The decisive question was the applicability of the amended section 153C, especially the provision inserted by the Finance Act, 2021, which bars application of that section in relation to searches initiated on or after 01.04.2021. The date on which seized material was received by the Assessing Officer was not available from the record. In that situation, the date of recording of satisfaction, 28.09.2021, was treated as the relevant date. Since that date fell after the statutory cut-off, the notice issued under section 153C and the consequent assessment were held to be without jurisdiction. The addition on merits was not separately sustained once the jurisdictional defect was found.
Conclusion: The assumption of jurisdiction under section 153C was invalid and the assessments were quashed.
Final Conclusion: All six appeals succeeded because the assessments made on non-searched person basis under section 153C were found unsustainable in law.
Ratio Decidendi: Where, after the Finance Act, 2021 amendment, the satisfaction for initiating action under section 153C is recorded after 01.04.2021 and the record does not establish an earlier receipt of seized material by the Assessing Officer, jurisdiction under section 153C cannot be validly assumed.
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