Itta/254/2014 Of Commissioner Of Income Tax-Iii v. Sri Rao Subba Rao

HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’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 SENGUPTAANDHON’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 againstthe judgment and order of the learned Tribunal dated 31[st] January2013 in relation to the assessment year 2006-07 on the followingsuggested questions of law: (i) In the facts and circumstances of the case,whether the learned Tribunal (ITAT) is correct in lawin quashing the assessment orders passed by theAssessing Officer in terms of Section 153 of theIncome Tax Act 1961 consequent to searchoperations, 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 forissue of notice under Section 153C of the Income TaxAct 1961, whereas Section 153C(1) of the Act onlyprovides for mere ‘satisfaction’ but not “recording ofsatisfaction”? (iii) In the facts and circumstances of the case,whether the ITAT is correct in law in takingcognizance of the version that the respondent-assessee filed returns in the status of HUF voluntarilyfor the assessment years 2000-2001 to 2006-2007 on29-12-2006, ignoring the fact that the returns werefiled subsequent to the search? (iv) In the facts and circumstances of thecase, whether the ITAT is justified in law in relying onthe decision of the Hon’ble Supreme Court in the caseof Manish Maheswari, in which case, the AssessingOfficer of the assessee in his individual status wasdifferent from the Assessing Officer of theassessee’s HUF, as distinct from the present casewherein, the respondent-assessee in his individual status and his HUF are assessed by one AssessingOfficer, thereby, nullifying the necessity for recordingof satisfaction and handing over of the material asrequired under Section 153C of the Income Tax Act? We have heard the learned Counsel for the appellant andhave gone through the judgment and order of the learned Tribunal. In paragraph No.78.22 of the judgment, the learned Tribunal onfact found that there is clear non-fulfillment of conditions laid downin Section 153C of the Income Tax Act, 1961, as there is norecording of satisfaction by the Assessing Officer that undisclosedincome belongs to any person other than the person who wassearched which is a condition precedent. Settled position of lawhas been applied. Therefore, we do not find any reason tointerfere with the judgment and order of the learned Tribunal. Accordingly, we dismiss the appeal. Miscellaneous petitionspending, if any, shall stand closed. No order as to costs. ___________________ K.J. SENGUPTA, CJ __________________ SANJAY KUMAR, J