Delhi HC Rejects Plea Challenging Initiation Of Proceedings U/S 153C Of Income Tax Act Against Indian National Congress
The Delhi High Court dismissed writ petitions filed by Indian National Congress challenging the initiation of proceedings under Section 153C of the Income Tax Act, 1961.
The Congress Party had filed three writ petitions pertaining to the Assessment Years(AY) 2014-15, 2015-16 and 2016-17.
The Division Bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed “The writ petitioner has thus chosen to approach this Court only a few days before the time for completion of assessment would expire and at the proverbial fag end of the proceedings. We consequently find no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution. However and whether the asserted delay in commencement of proceedings would be fatal to the assessment itself is a question that we leave open to be urged at an appropriate juncture.”
Senior Advocates Abhishek Manu Singhvi, A.S. Chandhiok and P.C. Sen appeared for the Petitioner while SSC Zoheb Hossain appeared for the Respondents.
In the present matter, based on the material, which was gathered in the course of searches, the Assessing Officer of the searched persons drew corresponding Satisfaction Notes for the initiation of proceedings against the Petitioner in terms of Section 153C of the Act on various dates the details whereof are set out in the judgment.
The Bench said, “Regard must be had to the indubitable fact that the Satisfaction Note merely forms the foundation for the initiation of action and which would enable us to evaluate whether an opinion has been validly formed. As long as it rests on incriminating material which pertains to the AYs’ in question, the same would qualify the requirement of Section 153C. We deem it apposite to observe that while it would be imperative for the Satisfaction Note to refer to the material pertaining to the AYs‘ which are sought to be reopened, a consolidated Satisfaction Note clearly does not appear to be an anathema provided it rests on material which pertains to the AYs‘ which are sought to be reopened.”
Senior Counsel Singhvi submitted that the assessment proposed to be undertaken for AYs 2014-17 would be barred by the period of limitation as raised by the First Proviso to Section 153C of the Act. He contended that assessment under Section 153C of the Act could have at best covered the period of AYs 2017-18 to 2020-21 and the three additional AYs namely 2014-17 would be barred by limitation.
Per contra, the Court observed that “The argument of the proceedings being barred by limitation clearly falters and fails to impress us bearing in mind the indubitable position of the 153C power to assess or to reassess being available to be invoked either for six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted as well as for the relevant assessment year or years as defined in Section 153A.”
The Court finally observed that these petitions came to be preferred long thereafter on March 19, 2024. It noted the statutory timeframes stipulated under Section 153B of the Act for completion of assessment proceedings and more particularly the Second and Third Proviso which mandate the assessment itself being completed within twelve months from the time when the books of account or material are handed over to the AO of the non-searched person. “This would mean that in the present case and taking the date of handing over or recordal of satisfaction as constituting the date from which that period is liable to be reckoned, the assessment is liable to be completed by 31 March 2024.”, the Bench said.
Accordingly, the Court dismissed the writ petitions.
Cause Title: Indian National Congress v. Deputy Commissioner Income Tax and Ors. (Neutral Citation: 2024:DHC:2303-DB)
Appearances:
Petitioner: Senior Advocates Dr. A. M. Singhvi, Vivek Tankha, A. S. Chandhiok, P.C. Sen, Advocates Amit Bhandari, Siddharth S., Vipul Tiwari, Inder Singh, Simran Kohli, Vidhushi Keshari, Kanishka Singh, Nikhil Bhalla and Swati Arya.
Respondents: SSC Zoheb Hossain, Vipul Agrawal, Advocates Sanjeev Menon, Sakshi Shairwal and Vivek Gurnani.