HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.254 of 2014 Date: 15.04.2014 Between:
Commissioner of Income Tax-III, Hyderabad . Appellant AND Sri Rao Subba Rao (HUF), Hyderabad ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.254 of 2014 JUDGMENT: (per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dated 31st January 2013 in relation to the assessment year 2006-07 on the following suggested questions of law:
(i) In the facts and circumstances of the case, whether the learned Tribunal (ITAT) is correct in law in quashing the assessment orders passed by the Assessing Officer in terms of Section 153 of the Income Tax Act 1961 consequent to search operations, which are in accordance with law?
(ii) In the facts and circumstances of the case, whether the ITAT is justified in law in holding that ‘recording’ of satisfaction is a condition precedent for issue of notice under Section 153C of the Income Tax Act 1961, whereas Section 153C(1) of the Act only provides for mere ‘satisfaction’ but not “recording of satisfaction”?
(iii) In the facts and circumstances of the case, whether the ITAT is correct in law in taking cognizance of the version that the respondent- assessee filed returns in the status of HUF voluntarily for the assessment years 2000-2001 to 2006-2007 on 29-12-2006, ignoring the fact that the returns were filed subsequent to the search?
(iv) In the facts and circumstances of the case, whether the ITAT is justified in law in relying on the decision of the Hon’ble Supreme Court in the case of Manish Maheswari, in which case, the Assessing Officer of the assessee in his individual status was different from the Assessing Officer of the assessee’s HUF, as distinct from the present case wherein, the respondent-assessee in his individual status and his HUF are assessed by one Assessing Officer, thereby, nullifying the necessity for recording of satisfaction and handing over of the material as required under Section 153C of the Income Tax Act?
We have heard the learned Counsel for the appellant and have gone through the judgment and order of the learned Tribunal. In paragraph No.78.22 of the judgment, the learned Tribunal on fact found that there is clear non-fulfillment of conditions laid down in Section 153C of the Income Tax Act, 1961, as there is no recording of satisfaction by the Assessing Officer that undisclosed income belongs to any person other than the person who was searched which is a condition precedent. Settled position of law has been applied. Therefore, we do not find any reason to interfere with the judgment and order of the learned Tribunal.
Accordingly, we dismiss the appeal. Miscellaneous petitions pending, if any, shall stand closed. No order as to costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J
15-4-2014
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