Riddhi Siddhi Infraspace Llp v. Assistant Commissioner Of Income Tax Cent Cir 1(4), Ahmedabad

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 7617 of 2021 ========================================================== RIDDHI SIDDHI INFRASPACE LLP VersusASSISTANT COMMISSIONER OF INCOME TAX CENT CIR 1(4),AHMEDABAD ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1M R BHATT & CO.(5953) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKOREDate : 12/04/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.By this writ application under Article 226 of theConstitution of India, the writ applicant has prayed for thefollowing reliefs; “(a) Quash and set aside the impugned notices atAnnexure-A as well as the order disposing off theobjections at Annexure-C to this petition. (b)Pending the admission, hearing and finaldisposal of this petition, to stay implementation andoperation of the notices at Annexure-A to thispetition and stay further proceedings for assessmentfor A.Y.2013-14 to A.Y.2018-19. (c )Any other and further relief deemed just andproper be granted in the interest of justice. (d)To provide for the cost of this petition.” 2.The writ applicant is a Limited Liability Partnership. Itappears from the materials on record that a search actionunder Section 132 of the Income Tax Act, 1961 (for short“the Act, 1961”) was carried out on 01.02.2019 in thecases of Riddhi Siddhi Group of Companies. In the searchcarried out, one of the group concerns of the writapplicant, namely, Riddhi Siddhi Gluco Boils Ltd. was alsocovered. 3.In view of the aforesaid, notices came to be issued tothe writ applicant under Section 153C on 13.01.2021 forA.Y.2013-14, 2014-15, 2015-16, 2016-17, 2017-18 and2018-19 respectively. In such circumstances, referred toabove, the writ applicant is here before this Court with thepresent writ application. 4.Mr. S.N. Soparkar, the learned senior counselassisted by Mr.B.S. Soparkar, the learned counselappearing for the writ applicant would submit that he hasmany fold contentions to raise questioning the legality andvalidity of the notices issued under Section 153C. Hesubmitted that some of his submissions may be in therealm of facts and this Court may not be in a position togo into all such details at this stage. However, Mr.Soparkar is very sure of one of his submissions so far asthe legality and validity of the notice issued for theA.Y.2013-14, 2014-15, 2015-16 and 2016-17 respectivelyare concerned. The principal submission of Mr. Soparkar is how could such notices have been issued under Section153C for the above referred assessment years moreparticularly when the Limited Liability Partnership cameinto existence for the first time in 2016. 5.In the aforesaid context, Mr. Soparkar invited theattention of this Court specifically to Clause (6) of theobjections raised by the writ applicant to the satisfactionnote recorded by the Joint Commissioner of Income Tax(OSD). In clause (6), the following has been stated; “6.Mechanical Satisfaction Note without applicationof mind is invalid 6.1The satisfaction note 13.01.2021 has beenrecorded for combined period of AY 2013-14 to AY2018-19 with a view to cover the maximum possibletime period as permitted u/s.153C of the Act. 6.2It is humbly submitted that the our LLP wasincorporated on 30.05.2016 and thus was not inexistence for AY 2013-14 to AY 2016-17, yet the AOhas recorded satisfaction for such years. 6.3This fact proves that the satisfaction has beenrecorded in mechanical manner and withoutverifying the information.” “6.Mechanical Satisfaction Note without applicationof mind is invalid 6.1The satisfaction note 13.01.2021 has beenrecorded for combined period of AY 2013-14 to AY2018-19 with a view to cover the maximum possibletime period as permitted u/s.153C of the Act. 6.2It is humbly submitted that the our LLP wasincorporated on 30.05.2016 and thus was not inexistence for AY 2013-14 to AY 2016-17, yet the AOhas recorded satisfaction for such years. 6.3This fact proves that the satisfaction has beenrecorded in mechanical manner and withoutverifying the information.” 6.Mr. Soparkar pointed out that the aforesaid objectionought to have been taken into consideration by theAssessing Officer, more particularly, when it is evidentfrom the documentary evidence itself that the LimitedLiability Partnership came into existence for the first timein 2016. However, the Assessing Officer seems to have taken the view that although the Limited LiabilityPartnership might have come into existence for the firsttime in 2016, yet, all this can be looked into at the time ofthe assessment proceedings. Mr. Soparkar invited theattention of this Court to the relevant part of the orderpassed by the Assessing Officer disposing of theobjections, more particularly, Para-8.1 which reads thus; “8.1 Contention of the assessee perused carefullybut not found tenable in view of the followingobservations/facts/evidences. 8.1.1 Contention of the assessee that satisfactionhas been recorded in mechanical manner andwithout verifying the information is not acceptable ason verification of the satisfaction note, it is clearlyevident that the AO has examined the entiredocument seized from the business premises of theRiddhi Siddhi Group as well as digital evidencesseized during the search proceedings. 8.1.2 On verification of the satisfaction note, it will benoticed that the AO has made detailed analysis ofthe document seized during the search proceedingsand after the detailed analysis, the AO came toconclusion that the proceedings u/s.153C of theIncome Tax Act has to be initiated in the case of theassessee. The same is amply clear from the plainreading of the satisfaction note. Further, in respect of initiating proceedings forA.Y.2013-14 to A.Y.2018-19, it is stated by theassessee that the LLP was incorporated on30.05.2016 and hence there was no existence of theLLP duly for A.Y.2013-14 to A.Y.2016-17. In thisconnection, it is stated that the contention of theassessee will be considered while passingassessment order u/s.143(3) r.w.s. 153C & 153A for the A.Y.2013-14 to A.Y. 2016-17. Therefore,contention of the assessee is not acceptable and theobjection that the satisfaction has been drawnmechanically is baseless and devoid of any merit.” 7.In the last, Mr. Soparkar pointed out somethingimportant. There is no any interim order passed in thisparticular writ application. In such circumstances, theassessment proceedings proceeded further, however, weare informed that the Assessing Officer has thought fit notto frame the assessments for the A.Y.2013-14, 2014-15,2015-16 and 2016-17 respectively. 8.In such circumstances, referred to above, Mr.Soparkar prays that there being merit in his principalsubmission, this writ application may be allowed so far asthe four impugned notices for the relevant assessmentyears are concerned. 9.Per contra, Mr. M.R. Bhatt, the learned senior counselappearing for the revenue has vehemently opposed thiswrit application. 10.Mr. Bhatt would submit that this Court, in exercise ofits extraordinary jurisdiction under Article 226 of theConstitution may not interfere at the stage of Section153C. He would submit that let the inquiry be concludedand the assessment orders be framed. 11.Having heard the learned counsel appearing for theparties and having gone through the materials on record, 8.In such circumstances, referred to above, Mr.Soparkar prays that there being merit in his principalsubmission, this writ application may be allowed so far asthe four impugned notices for the relevant assessmentyears are concerned. 9.Per contra, Mr. M.R. Bhatt, the learned senior counselappearing for the revenue has vehemently opposed thiswrit application. 10.Mr. Bhatt would submit that this Court, in exercise ofits extraordinary jurisdiction under Article 226 of theConstitution may not interfere at the stage of Section153C. He would submit that let the inquiry be concludedand the assessment orders be framed. 11.Having heard the learned counsel appearing for theparties and having gone through the materials on record, we are of the view that we need not enter into any debateas regards the constitution or registration of the LLP. Wesay so because when the assessment orders are notpassed for the A.Y. 2013-14, 2014-15, 2015-16 and 2016-17 respectively, the matter ends over here. So far as2017-18 and 2018-19 are concerned, as the assessmentorders have already been passed, we decline to go intoany other issues with respect to these two notices. 12.In view of the aforesaid, this writ applicationsucceeds in part. The impugned notices with respect toA.Y.2013-14, 2014-15, 2015-16 and 2016-17 are herebyquashed and set aside. So far as the assessment orderswhich have already been passed with respect to A.Y.2017-18 and 2018-19, it shall be open for the writ applicant tofile appropriate appeal in accordance with law. We havekept all the questions of law open to be agitated by thewrit applicant before the CIT(A) while challenging theassessment orders. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Vahid