Whether satisfaction note be recorded within reasonable time from assessment of searched assessee?

[2026] 133 ITR (Trib.) 460 (#Ahmedabad D – Bench)
Income-Tax Officer
V.
#Pranav #Praful #Chandra #Vora
Smt. Annapurna Gupta (AM) and Ms. Suchitra Kamble (JM)
15.05.2025
Playlist: 132, 153A, 153C, Rule 27 (ITAT Rules 1963)
#132: #Search and #seizure
#153A: #Assessment in case of search or requisition
#153C: Assessment of income of any other person
Question: Whether #satisfaction #note be recorded within reasonable time from assessment of searched assessee?
1. As is evident from a bare pursual of rule 27 of the Income-Tax (Appellate Tribunal) Rules, 1963, if a respondent has not filed an appeal or cross-objection, he is entitled to raise grounds in support of the order appealed against, on any of the ground which are decided against him.
2. The only condition is that the ground raised should be in support of the order of Commissioner (Appeals) and on an issue decided against him.
3. The AO of the searched person should prepare the satisfaction note within a reasonable time of being in possession of all material found during the search, which begins with his initiation of proceedings against the searched person, the conducting of assessment of the searched person and concludes with his assessment.
4. This applies to the provisions of section 153C of the Income-Tax Act, 1961 also.
5. Pursuant to recovery of materials in the course of search proceedings, the AO of the person in respect of whom the search was conducted recorded a satisfaction note and transferred the material to the AO having jurisdiction over the assessee.
6. Proceedings under section 153C were thereafter initiated, and assessment was framed under section 153A.
7. The CIT(A) held, inter alia, that the assumption of jurisdiction under section 153C was invalid, as the procedure mandated under law had not been properly followed and that the assessment was completed in violation of the principles of natural justice, since no opportunity of cross-examination of the builder or authorised person connected with the seized mater had been provided.
8. On appeal by the Department in which the assessee raised an additional ground under rule 27 of the Rules, to the effect that the assessment was invalid because the satisfaction note had been recorded after inordinate delay.
9. It was held accordingly, dismissing the appeal that the grounds raised by the assess as a respondent, were vis-à-vis challenging the validity of the jurisdiction assumed by the AO of the assessee under section 153C of the Act on the ground that satisfaction recorded by the AO of the searched person was beyond limitation.
10. Admittedly, the ground was never raised before the CIT(A) and therefore the issue was not decided against the assessee.
11. Therefore, strictly reading rule 27 of the Rules, the assessee apparently was not entitled to raise this ground.
12. However, even dehors rule 27 of the Rules, it was open to the respondent in an appeal before the Tribunal to raise new ground in defence of the order appealed against in view of the inherent powers of the Tribunal under section 254(1) to entertain arguments of the respondent subject to the condition that no new facts are required to be brought on record.
13. That the AO of the searched person had recorded the satisfaction almost a year after the conclusion of the assessment of the searched person.
14. The satisfaction recorded could not be said to be within the reasonable time limit prescribed, i.e. latest immediately after conclusion of proceedings on the person searched.
15. The jurisdiction, therefore, assumed by the AO of the assessee to frame assessment under section 153C of the Act, basis this satisfaction note of the AO of the searched person, was clearly invalid and the assessment framed as a consequence under section 153C of the Act was not sustainable in law.

#IncomeTaxNotices
#IncomeTaxCases
#incometaxcasesanalysis
#IncomeTaxLaw
#advocateamitkumargupta
#9811291390(Call only after taking time on whatsApp)
#amitkrg246@gmail.com
#amitkrg246@yahoo.com

Link for some important videos:

1) WHETHER TRIBUNAL CAN REMAND MATTER IN ENTIRETY WHERE DEPARTMENT DID NOT FILE CROSS APPEALS?- https://www.youtube.com/watch?v=gkqMk...

2) WHETHER ASSESSEE HAS ALSO TO CHALLENGE THE FINDINGS OF THE A.O THAT NOTICE HAS BEEN SERVED?- https://www.youtube.com/watch?v=XbZWh...

3) WHETHER EXTENDED TIME LIMIT U/S 149(1)(b) CAN BE USED ON THE BASIS OF SALES CONSIDERATION U/S 48?- https://www.youtube.com/watch?v=WuRt9...

4) WHETHER NOTICE SENT TO SECONDARY EMAIL IS VALID IF NOT SENT TO PRIMARY E-MAIL U/S 148?- https://www.youtube.com/watch?v=aAzHE...

5) WHETHER ENTRIES IN BOOKS OF ACCOUNTS CONCLUSIVE TO DETERMINE TAXABLE INCOME OF ASSESSEE?- https://www.youtube.com/watch?v=Rx8JQ...

Видео Whether satisfaction note be recorded within reasonable time from assessment of searched assessee? канала Advocate Amit Kumar Gupta