TaxTMI 
TaxTMI 
2026 (8) TMI 383
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....dit of Rs.9,00,000/- on account of unexplained income earned by the appellant. 3. On the facts and circumstances of the case and in law, the Learned CIT(Appeals) is not justified in not appreciating that the assessment order passed u/s 153C of the Act is bad in law and ab initio void since the assumption of jurisdiction u/s 153C by the Assessing Officer is vitiated in the absence of recording of a legally valid satisfaction in the satisfaction note for the instant assessment year which falls within the ambit of "relevant assessment year" regarding the fulfilment of the mandatory condition laid down in the fourth proviso to section 153A(1) that the books of account or other documents or evidence in the possession of the Assessing Officer reveal that income represented in the form of an asset has escaped assessment in the said assessment year. 4. On the facts and circumstances of the case and in law, the Ld.CIT (Appeals) ought to have held that the assessment order passed u/s 153C of the Act is bad in law and ab initio void since the assumption of jurisdiction u/s 153C by the Assessing Officer is vitiated in the absence of recording of a legally valid satisfaction i....
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....eized Annexure A/PSS/CORP/18, M/s. Polisetty Somasundaram had, over the year, carried out cash transactions with the assessee, viz., (i) cash received by the assessee from M/s. Polisetty Somasundaram: Rs.81,48,675/-; (ii) cash payments made by the assessee to M/s. Polisetty Somasundaram: Rs.50,40,000/-. The AO called upon the assessee to put forth an explanation regarding the source of the aforesaid cash payments made to M/s. Polisetty Somasundaram aggregating to Rs.50,40,000/-. As the assessee failed to come forth with any explanation regarding the source of the subject cash payments to the satisfaction of the AO, the latter added the same to the total income of the assessee and vide his order passed under section 153C r.w.s 144 of the Act, dated 144, dated 28/03/2022, determined his income at Rs.53,20,990/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(A), who, going by the peak credit/debit theory, scaled down the addition of Rs.50.40 lakhs made by the AO to the amount of peak credit of Rs.9 lakhs and vacated the balance addition. 6. The assessee, aggrieved with the order of the CIT(A), has carried the matter in appeal before us. 7. We have hea....
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.... Section 153C of the Act, the assessee filed his return of income declaring the same income. Thereafter, the AO, treating the alleged cash transactions reflected in the seized material as unexplained income of the assessee, completed the assessment by adding Rs.50,40,000/-, which addition was, on appeal, scaled down by the CIT(A) to Rs.9 lakhs. 14. The assessee has before us, inter alia, challenged the validity of the assessment proceedings on the ground that the assumption of jurisdiction under section 153C of the Act was invalid, as the satisfaction note did not record the mandatory requirements prescribed under the "fourth proviso" to section 153A(1) of the Act, particularly in respect of the Assessment Year under consideration, which falls beyond the period of six assessment years from the relevant date. The Ld. AR submitted that in view of the judgment of the Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Jasjit Singh (supra), the relevant date for determining the six assessment years in the case of a person other than the searched person is the date on which the AO having jurisdiction over such other person receives the books of account, documents or as....
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....nt records, it is observed that there is no specific satisfaction recorded by the AO regarding the fulfillment of the mandatory condition that the escaped income is represented in the form of an "asset" as required under the "fourth proviso" to Section 153A(1) of the Act. Rather, we find that the satisfaction note merely refers to certain alleged cash transactions reflected in the seized material and does not establish that such escaped income was represented as an "asset" exceeding the prescribed threshold. 19. We thus, in the backdrop of our aforesaid deliberations, are of firm conviction that the requirement prescribed under the "fourth proviso" to section 153A(1) of the Act is a jurisdictional condition and not a mere procedural formality, and the failure to satisfy such statutory requirement would render the assumption of jurisdiction under section 153C of the Act as invalid. Accordingly, the proceedings initiated under section 153C of the Act cannot be sustained merely on the basis of the availability of seized material unless the conditions prescribed by the statute for invoking such extraordinary jurisdiction are duly satisfied. 20. We are of the view that considering....