GUJARAT HIGH COURT: Virat Alloys Private Limited v. The Assistant Commissioner of Income Tax Circle, Gandhinagar (SCA No. 5039/2024)
Background: The petitioner company filed its revised return of income for the A.Y 2015-16 on 09.03.2017 declaring its income of Rs. Nil. A search was carried out in case of M/s World Window Group. It was the case of the petitioner that it has not undertaken any kind of business or transaction with M/s World Window Group. The petitioner was issued notice under Section 153(C) of the IT Act and accordingly, the petitioner-company filed its reply. It was submitted that the satisfaction note of the searched person i.e. M/s World Window Group was recorded and the petitioner has been conveyed the satisfaction note, i.e. beyond the reasonable period of limitation.
Decision: The Court quashed a Section 153C proceedings against a company after noting that the AO satisfaction note did not bear any date and that the note, though recorded in 2022 was “supplied” to the company only in 2024 i.e., after a delay of two years without any explanation. For context, Section 153C empowers the tax authority to assess the income of any person whose documents or assets are found during a search or seizure operation on a different person. Hence, the notice issued under section 153(C) becomes vulnerable. Accordingly, the Petition is allowed.
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