Validity of reopening of the cases for all the six years U/s 153C without indiscriminating material
Here is an important judgement by Delhi High Court on initiating proceedings u/s 153C wherein issuance of the notice was preceded by the drawl of a Satisfaction Note by the jurisdictional AO.
The importance of material recovered in the course of a search or a requisition made and a right to reassess u/s 153A and 153C was also discussed in the case. The case details is as under:
Delhi High Court in SAKSHAM COMMODITIES LIMITED, MODICARE LIMITED, SUSHEEL JAIN, VIKAS WAHI, MAMTA AGARWAL, W.P.(C) 1459/2024 & CM APPL 6031/2024, W.P.(C) 3007/2023, W.P.(C) 3019/2023, W.P.(C) 3681/2023, W.P.(C) 693/2024 & CM APPL 3073/2024, W.P.(C) 695/2024 & CM APPL 3078/2024, W.P.(C) 718/2024 & CM APPL 3176/2024,
Dated.- April 9, 2024
The key observation by the court was under:
- When tested in light of the aforesaid principles, we find that except for a few exceptions which were noticed in the introductory parts of this judgment, the writ petitions forming part of this batch, impugn the invocation of Section 153C in respect of AYs’ for which no incriminating material had been gathered or obtained.
- The Satisfaction Notes also fail to record any reasons as to how the material discovered and pertaining to a particular AY is likely to “have a bearing on the determination of the total income” for the year which is sought to be abated or reopened in terms of the impugned notices.
- The respondents have erroneously proceeded on the assumption that the moment any material is recovered in the course of a search or on the basis of a requisition made, they become empowered in law to assess or reassess all the six AYs’ years immediately preceding the assessment co-relatable to the search year or the “relevant assessment year” as defined in terms of Explanation 1 of Section 153A.
- The said approach is clearly unsustainable and contrary to the consistent line struck by the precedents noticed above.
