BHUPINDER SINGH KAPUR V. INCOME TAX OFFICER AND ANOTHER

CWP/25294/2024

AI Insights

The case involves multiple petitions filed by Bhupinder Singh Kapur against the Income Tax Officer, challenging the notices issued under sections 153C and 142(1) of the Income Tax Act, 1961. The petitioner argued that these notices were issued without jurisdiction, citing a search conducted under section 132(1) and subsequent assessment proceedings. The court examined the procedural adherence to the Income Tax Act and relevant Supreme Court directives, particularly focusing on the timing of the satisfaction note and the issuance of notices. The court concluded that the notices were validly issued and dismissed the petitions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 675719 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 06-11-2024
• Assessment Year: misc
• Other Referred Cases: Knitwears (2014) 362 ITR 673 (SC), Commissioner of Income-tax III vs. Calcutta, Commissioner of Income-tax vs. Jasjit Singh (2023) 458 ITR 43 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: YOGESH PUTNEY; VAIBHAV GUPTA
• Assessee Lawyers: RANA SINGH; NIKHIL GOYAL
• Keywords: Assessment proceedings; Jurisdiction; Satisfaction note; Search; Delay in issuance
• Section: 142(1); 153A; 153C; 158BC; 132(1)

Judgement Text

"CWP-25294-2024 111+ 107, 108, 109, 110, IN THE HIGH COURT OF PUNJAB AND HARYANA AT BHUPINDER SINGH KAPUR INCOME TAX OFFICER AND ANOTHER CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH HON’BLE MR. JUSTICE Present: Mr Mr. Nikhil Goyal Mr. Yogesh Putney, Mr. Vaibhav Gupta, Standing Counsel for the SANJEEV PRAKASH SHARMA, J.(Oral) 1. The petitioner by way of present petition 30.03.2024 1961 (‘the Act’) and the notice the Act on the ground that the same have been issued without jurisdiction. 2. Learned counsel for the petitioner submits that a search under section 132(1) of the Act was conducted on 28.01.2021 and the assessment proceedings were completed under section 158BC (now section 153A) of 2024 (O&M) Page 1 of 5 , 108, 109, 110, 112 and 113 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH BHUPINDER SINGH KAPUR Vs. INCOME TAX OFFICER AND ANOTHER **** HON’BLE MR. JUSTICE SANJEEV PRAKASH HON’BLE MR. JUSTICE SANJAY VASHISTH **** Mr. Rana Gurtej Singh, Advocate with Mr. Nikhil Goyal, Advocate for the petitioner Mr. Yogesh Putney, Sr. Standing Counsel Mr. Vaibhav Gupta, Standing Counsel for the respondents/Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) The petitioner by way of present petition 30.03.2024 issued to him under section 153C of the Income Tax Act, 1961 (‘the Act’) and the notices dated 23.08.2024 under section 142(1) of the Act on the ground that the same have been issued without jurisdiction. Learned counsel for the petitioner submits that a search under section 132(1) of the Act was conducted on 28.01.2021 and the assessment ceedings were completed under section 158BC (now section 153A) of IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-25294-2024(O&M) Along with CWP-25252-2024(O&M) CWP-25256-2024(O&M) CWP-25280-2024(O&M) CWP-25287-2024(O&M) CWP-25316-2024(O&M) CWP-26261-2024 (O&M) Date of Decision: 06.11.2024 . . . . Petitioner . . . . Respondents HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Rana Gurtej Singh, Advocate with , Advocate for the petitioner(s). Sr. Standing Counsel with Mr. Vaibhav Gupta, Standing Counsel SANJEEV PRAKASH SHARMA, J.(Oral) The petitioner by way of present petitions assails the notices dated issued to him under section 153C of the Income Tax Act, dated 23.08.2024 under section 142(1) of the Act on the ground that the same have been issued without jurisdiction. Learned counsel for the petitioner submits that a search under section 132(1) of the Act was conducted on 28.01.2021 and the assessment ceedings were completed under section 158BC (now section 153A) of (O&M) Along with (O&M) (O&M) (O&M) (O&M) (O&M) (O&M) .2024 Petitioner s dated issued to him under section 153C of the Income Tax Act, dated 23.08.2024 under section 142(1) of the Act on the ground that the same have been issued without jurisdiction. Learned counsel for the petitioner submits that a search under section 132(1) of the Act was conducted on 28.01.2021 and the assessment ceedings were completed under section 158BC (now section 153A) of MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document CWP-25294-2024 the Act proceedings have been initiated against the petitioner on 30.03.2024 by issuing notice 3. Learned counsel relies on the circular No.24/2015 issued on 31.12.2015 wherein the Ministry of Finance judgment passed in Knitwears (2014) 362 ITR 673 (SC) note under section 158BD/153C of the Act. 4. Learned counsel submits that as per the said circular and directions of the Hon’ble Supreme Court, the satisfaction could be prepared for any other person at any of the following stages: proceedings against the searched person under section 158BC of the Act; or under section 158BC of the Act; or are searched person.” 5. Learned counsel submits that as the satisfaction note was prepared by the AO on 31.10.2023, which is more than one year after the assessment proceedings against the concerned s same is highly belated and is not in tune with the directions issued by the Supreme Court, and such proceedings against the petitioner and the same deserve to be withdrawn. 6. Learned counsel ha initiated for Assessment Year 2015 2024 (O&M) Page 2 of 5 the Act against the searched person, and after more than one year, the proceedings have been initiated against the petitioner on 30.03.2024 by issuing notices under section 153C of the Act. Learned counsel relies on the circular No.24/2015 issued on 31.12.2015 wherein the Ministry of Finance issued directions judgment passed in Commissioner of Income Knitwears (2014) 362 ITR 673 (SC), relating to recordi note under section 158BD/153C of the Act. Learned counsel submits that as per the said circular and directions of the Hon’ble Supreme Court, the satisfaction could be prepared for any other person at any of the following stages: “(a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person.” Learned counsel submits that as the satisfaction note was prepared by the AO on 31.10.2023, which is more than one year after the assessment proceedings against the concerned searched person were completed, same is highly belated and is not in tune with the directions issued by the Supreme Court, and such proceedings against the petitioner and the same deserve to be withdrawn. Learned counsel has further argued that the proceedings have been initiated for Assessment Year 2015-16, 2016 the searched person, and after more than one year, the proceedings have been initiated against the petitioner on 30.03.2024 by under section 153C of the Act. Learned counsel relies on the circular No.24/2015 issued on 31.12.2015 issued directions in tune with the Commissioner of Income-tax III vs. Calcutta , relating to recording of satisfaction note under section 158BD/153C of the Act. Learned counsel submits that as per the said circular and directions of the Hon’ble Supreme Court, the satisfaction could be prepared for any other the time of or along with the initiation of proceedings against the searched person under section (b) in the course of the assessment proceedings (c) immediately after the assessment proceedings completed under section 158BC of the Act of the Learned counsel submits that as the satisfaction note was prepared by the AO on 31.10.2023, which is more than one year after the assessment earched person were completed, the same is highly belated and is not in tune with the directions issued by the ought not had been pressed as against the petitioner and the same deserve to be withdrawn. s further argued that the proceedings have been 16, 2016-17, 2017-18 in CWP- the searched person, and after more than one year, the proceedings have been initiated against the petitioner on 30.03.2024 by Learned counsel relies on the circular No.24/2015 issued on 31.12.2015 the tax III vs. Calcutta ng of satisfaction Learned counsel submits that as per the said circular and directions of the Hon’ble Supreme Court, the satisfaction could be prepared for any other Learned counsel submits that as the satisfaction note was prepared by the AO on 31.10.2023, which is more than one year after the assessment the same is highly belated and is not in tune with the directions issued by the as s further argued that the proceedings have been - MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document CWP-25294-2024 25316-2024 which fall beyond the period of six years, and therefore the proceedings ought not be the Supreme Court in the case of Singh (2023) 458 ITR 43 (SC). 7. With regard to the aforesaid two objections, we have examined the case of the petitioner in submitted an objection relating to the notice under section 153C of the Act before the the objection relating to delay in issuance of notice under section the Act, and of satisfaction note being prepared after a period of one year. The other objection relating to the period of limitation beyond six years has not been taken by the petitioner, and the concerned authority has therefore passed an order in issuing of notice after the satisfaction note was prepared. 8. We find that after the search was conducted on 28.01.2021, the assessment proceedings were completed in September, 2022 under section 158BC (n person. The concerned Assessing Officer person drew a satisfaction note of initiating proceedings on the basis of the documents seized as against the petitioner transmitted the documents to the concerned AO who also drew his satisfaction note on 31.10.2023, whereafter the notice was issued to the petitioner under section 153C of the Act on 30.03.2024. Thus, we find that immediately after the assessment proceedings w 2024 (O&M) Page 3 of 5 2024, CWP-26261-2024, and which fall beyond the period of six years, and therefore the proceedings ought not be allowed to be continued. He relies on judgment passed by the Supreme Court in the case of Commissioner of Inxome Singh (2023) 458 ITR 43 (SC). With regard to the aforesaid two objections, we have examined the case of the petitioner in CWP-25294-2024 submitted an objection relating to the notice under section 153C of the before the concerned Assessing Officer ( the objection relating to delay in issuance of notice under section the Act, and of satisfaction note being prepared after a period of one year. The other objection relating to the period of limitation beyond six years has not been taken by the petitioner, and the concerned authority has therefore passed an order addressing to his objections relating to the delay in issuing of notice after the satisfaction note was prepared. We find that after the search was conducted on 28.01.2021, the assessment proceedings were completed in September, 2022 under section 158BC (now section 153A) of the Act . The concerned Assessing Officer person drew a satisfaction note of initiating proceedings on the basis of the documents seized as against the petitioner ansmitted the documents to the concerned AO who also drew his satisfaction note on 31.10.2023, whereafter the notice was issued to the petitioner under section 153C of the Act on 30.03.2024. Thus, we find that immediately after the assessment proceedings w , and CWP-25294-2024 respectively which fall beyond the period of six years, and therefore the proceedings allowed to be continued. He relies on judgment passed by Commissioner of Inxome-tax vs. Jasjit With regard to the aforesaid two objections, we have examined the case and find that the petitioner had submitted an objection relating to the notice under section 153C of the concerned Assessing Officer (AO) wherein he has taken the objection relating to delay in issuance of notice under section 153C of the Act, and of satisfaction note being prepared after a period of one year. The other objection relating to the period of limitation beyond six years has not been taken by the petitioner, and the concerned authority has addressing to his objections relating to the delay in issuing of notice after the satisfaction note was prepared. We find that after the search was conducted on 28.01.2021, the assessment proceedings were completed in September, 2022 under ow section 153A) of the Act against the searched . The concerned Assessing Officer (AO) of the said searched person drew a satisfaction note of initiating proceedings on the basis of the documents seized as against the petitioner on 07.06.2023 and ansmitted the documents to the concerned AO who also drew his satisfaction note on 31.10.2023, whereafter the notice was issued to the petitioner under section 153C of the Act on 30.03.2024. Thus, we find that immediately after the assessment proceedings were completed respectively which fall beyond the period of six years, and therefore the proceedings allowed to be continued. He relies on judgment passed by tax vs. Jasjit With regard to the aforesaid two objections, we have examined the case and find that the petitioner had submitted an objection relating to the notice under section 153C of the wherein he has taken 153C of the Act, and of satisfaction note being prepared after a period of one year. The other objection relating to the period of limitation beyond six years has not been taken by the petitioner, and the concerned authority has addressing to his objections relating to the delay We find that after the search was conducted on 28.01.2021, the assessment proceedings were completed in September, 2022 under the searched of the said searched person drew a satisfaction note of initiating proceedings on the basis of and ansmitted the documents to the concerned AO who also drew his satisfaction note on 31.10.2023, whereafter the notice was issued to the petitioner under section 153C of the Act on 30.03.2024. Thus, we find ere completed MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document CWP-25294-2024 against the searched person under section months, the satisfaction notice was prepared by the concerned AO. The words ‘immediately after the assessment proceedings’ as mentioned in the observations of the Hon’ble No.24/2015 issued on 31.12.2015 cannot be has to be done within a day or two or within a particular period. What is important is that before all the documents and pass a reasoned order. For that purpose, considering various aspects, certain time should be allowed to be granted to the authorities too, and it cannot be a mechanical process. 9. In view thereto, we do satisfaction note and proceeding further against the petitioner. 10. The other argument raised by learned counsel for the petitioner with regard to the of six years is concerned, under: reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having juris other person.” 11. Thus, there are four different circum consideration for calculation of the period. Since the petitioner has not 2024 (O&M) Page 4 of 5 against the searched person under section months, the satisfaction notice was prepared by the concerned AO. The words ‘immediately after the assessment proceedings’ as mentioned in the observations of the Hon’ble Supreme Court and noted in the circular No.24/2015 issued on 31.12.2015 cannot be has to be done within a day or two or within a particular period. What is important is that before AO issues a satisfaction note, he must look into all the documents and pass a reasoned order. For that purpose, considering various aspects, certain time should be allowed to be granted to the authorities too, and it cannot be a mechanical process. In view thereto, we do not agree that there is any dela satisfaction note and proceeding further against the petitioner. The other argument raised by learned counsel for the petitioner with regard to the 1st proviso to section 153C of the Act relating to the period of six years is concerned, we find that 1st “Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having juris other person.” Thus, there are four different circumstances which are to be taken into consideration for calculation of the period. Since the petitioner has not against the searched person under section 153A of the Act, within nine months, the satisfaction notice was prepared by the concerned AO. The words ‘immediately after the assessment proceedings’ as mentioned in Supreme Court and noted in the circular No.24/2015 issued on 31.12.2015 cannot be read to mean that the same has to be done within a day or two or within a particular period. What is issues a satisfaction note, he must look into all the documents and pass a reasoned order. For that purpose, considering various aspects, certain time should be allowed to be granted to the authorities too, and it cannot be a mechanical process. agree that there is any delay in preparing the satisfaction note and proceeding further against the petitioner. The other argument raised by learned counsel for the petitioner with section 153C of the Act relating to the period st proviso to section 153C reads as Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such stances which are to be taken into consideration for calculation of the period. Since the petitioner has not within nine months, the satisfaction notice was prepared by the concerned AO. The words ‘immediately after the assessment proceedings’ as mentioned in Supreme Court and noted in the circular to mean that the same has to be done within a day or two or within a particular period. What is issues a satisfaction note, he must look into all the documents and pass a reasoned order. For that purpose, considering various aspects, certain time should be allowed to be granted y in preparing the The other argument raised by learned counsel for the petitioner with section 153C of the Act relating to the period reads as stances which are to be taken into consideration for calculation of the period. Since the petitioner has not MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document CWP-25294-2024 taken any such objection before the concerned AO, we leave it open for the petitioner to raise if so required, and we need not delve on the said issue as the petitioner himself did not take up the said issue before the concerned AO, and the AO had no opportunity to pass any order on the said aspect. 12. We further observe that the proceedings under se are comprehensive in nature issued, ought to take all the objections and wait for a final decision in the matter. It cannot be said that they are in any manner of such a nature which can affect t him. 13. The writ petition, in our opinion, at this stage would therefore not be required to be entertained except on jurisdictional issue. Since we have noted that there is no jurisdictional error, w the petitions. 14. Thus, the petitions are accordingly 15. All pending applications also stand disposed of. November 06, 2024 Mohit goyal 1. Whether speaking/reasoned? 2. Whether reportable? 2024 (O&M) Page 5 of 5 taken any such objection before the concerned AO, we leave it open for the petitioner to raise the said objection at the relevant time as and when if so required, and we need not delve on the said issue as the petitioner himself did not take up the said issue before the concerned AO, and the AO had no opportunity to pass any order on the said aspect. We further observe that the proceedings under se are comprehensive in nature, and the person against whom notice is issued, ought to take all the objections and wait for a final decision in the matter. It cannot be said that they are in any manner of such a nature which can affect the day to day functioning of the petitioner and prejudice The writ petition, in our opinion, at this stage would therefore not be required to be entertained except on jurisdictional issue. Since we have noted that there is no jurisdictional error, w the petitions. Thus, the petitions are accordingly dismissed All pending applications also stand disposed of. (SANJEEV PRAKASH SHARMA , 2024 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No taken any such objection before the concerned AO, we leave it open for the said objection at the relevant time as and when, if so required, and we need not delve on the said issue as the petitioner himself did not take up the said issue before the concerned AO, and the AO had no opportunity to pass any order on the said aspect. We further observe that the proceedings under section 153C of the Act the person against whom notice is issued, ought to take all the objections and wait for a final decision in the matter. It cannot be said that they are in any manner of such a nature he day to day functioning of the petitioner and prejudice The writ petition, in our opinion, at this stage would therefore not be required to be entertained except on jurisdictional issue. Since we have noted that there is no jurisdictional error, we need not further delve with dismissed. All pending applications also stand disposed of. SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE Yes/No Yes/No taken any such objection before the concerned AO, we leave it open for , if so required, and we need not delve on the said issue as the petitioner himself did not take up the said issue before the concerned AO, and the ction 153C of the Act the person against whom notice is issued, ought to take all the objections and wait for a final decision in the matter. It cannot be said that they are in any manner of such a nature he day to day functioning of the petitioner and prejudice The writ petition, in our opinion, at this stage would therefore not be required to be entertained except on jurisdictional issue. Since we have e need not further delve with MOHIT GOYAL 2024.11.08 15:48 I attest to the accuracy and integrity of this document "