TMI Blog2021 (6) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... O and thus the issuance of notice under Section 153C on 14.06.2019 was erroneous since it was without satisfaction of the condition precedent. In fact, notice dated 14.06.2019 which has been placed in the typed set filed by petitioner at page 74 has caught Mr.Srinivas by surprise and it was only after this argument was specifically urged by the petitioner, that additional counter dated 11.02.2021 has come to be filed by R2 accompanied by a typed set containing the two satisfaction notes and note for transfer of files from IO to AO. Whether the issuance of notice dated 14.06.2019 without compliance of the statutory pre-condition, would vitiate all subsequent assessment proceedings including the impugned notice. R2, in his reply to the petitioner s rejoinder, reiterates that the procedure followed by the respondents is in accordance with law. There is no reference in any of the respondents pleadings to notice dated 14.06.2019. The respondents thus disavow notice dated 14.06.2019 and their case rests on the position that satisfaction notes were drawn up on 30.09.2019 and it was only parallel and pursuant thereto that the impugned notice under Section 153C dated 30.09.2019 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e their share-holding, the said individual undertook to find buyers for the company, such that all existing shareholders could exit. 4. On 01.10.2016, a Board resolution was passed recording the position that the existing shareholders resolved to exit the company and the aforesaid individual was authorised to identify a purchaser and engage in all actions for this purpose. According to the petitioner, the individual was not authorised to receive any consideration towards the aforesaid arrangement, either in part or in full and his mandate extended only to the extent of him identifying a purchaser. Thereafter matters were to be left with the Board and SIPCOT to take forward in a proper manner. 5. In pursuance of the above arrangement, the individual is said to have been entrusted with the temporary custody of all original documents including the lease deed with SIPCOT, share certificates and other documents that a prospective purchaser may seek for the purpose of conducting due diligence. A draft Memorandum of Undertaking (MOU) dated 22.11.2016 is also said to have been prepared by the individual duly executed by all Directors which was blank in regard to the details of the an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the petitioner. The counter went on to state that the Writ Petition was itself infructuous, since the provisional attachment had ceased to have effect after the expiry of six months from the date of attachment as per Statute. 11. The counter confirmed the position that as on that date, proceedings had yet to be initiated and that a notice under Section 153A or 153C as appropriate, was in the offing. Pending Writ Petition, a notice under Section 153C was received by the petitioner calling for returns for Assessment Year (AY) 2017. The notice was dated 14.06.2019 and called for a return on or before 08.07.2019. The petitioner, while pointing out that the time granted was short, in any event, called attention to its earlier return filed on 27.10.2017 declaring a loss, and which had been accepted by the Central Processing Centre (CPC) at Bangalore on 01.03.2018. It requested that the return filed earlier be treated as the return of income to be filed in compliance of the notice under Section 153C. 12. The petitioner also requested that the satisfaction note be furnished to the petitioner along with approval/sanction for issuance of the Section 153C notice, notification for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioner, the proceedings initiated under the impugned notices are without jurisdiction, since there is no income escaping assessment, which a pre-condition for the initiation of the proceedings themselves. The petitioner would urge that the seized documents do not incriminate it in any way and hence the respondents ought not to have commenced the present proceedings based on those documents. 18. Though reference is made to the factual aspects of the matter, i.e., the details of the materials seized, and the circumstances in which the documents came to be in the possession of the individual and thereafter in the possession of the person searched, I consciously desist from referring to either the details of the documents or the narration in regard to the transaction itself and restrict myself to the legal issues raised. 19. The petitioner would stress on the position that the individual had been prohibited from receiving any amount towards the sale of the company and the company thus disavows all relationship with such amounts. If at all such amount had been received by the individual, the same is not liable to be assessed in the petitioner s hands. 20. The individu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terfere in the challenge to assumption of jurisdiction, on this score. 25. The petitioner would also state that no satisfaction note, as contemplated under Section 153C has been furnished, despite a specific request. This is a precondition for the initiation of proceedings under Section 153 C in the absence of which the entire proceedings stand vitiated. The counter filed by the respondents in the earlier writ petition had initially stated that a notice under Section 153A/C was in the offing. Thereafter, and pending Writ Petition, a notice dated 14.06.2019 was received by the petitioner. 26. Mr. Srinivas was directed to produce the satisfaction note and had, at the time of admission on 20.12.2019 produced an undated document stating that the same was the satisfaction note of the IO. Counter dated 03.03.2020 also makes reference to the satisfaction note handed over to the petitioner on 20.12.2019 (last line of paragraph 6 of the counter). 27. A rejoinder has been filed wherein the petitioner objects to the satisfaction note stated to have been given to it on the ground that it does not reveal any material or reasoning to justify the initiation of proceedings against the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age number etc. (particulars to be specified) Search proceedings were conducted in the case of Smt.Sasikala on 09.11.2017. During the search and seizure proceedings in the case of V.K.Sasikala Group at Room No.302, Shylee Niwas Service Apartment, Nutech Washington, Old No.41, New No.76, Block II, 1st Main Road, CIT Nagar, Nandanam, Chennai on 18.11.2017 various incriminating materials in the form of lease agreements, incorporation certificates, original Share certificates and Memorandum of Understandings (MOUs) were seized vide annexure ANN/KGA/VKS/LS/S-2 to the Panchnama dated 18.11.2017 and incriminating materials in the form of loose sheets (page numbered 18 19) seized from the premises of Smt.Krishnapriya, daughter of Smt.Ilavarasi, at 181/69, Habibullah Road, T.Nagar, Chennai on 11.11.2017 vide annexure ANN/MS/KK/LS/S to the Panchanama dated 11.11.2017 which contained details of various assets purchased by Sasikala group and the consideration paid towards them. 6 Relationship of the person referred in S.No.4 with the person referred to in S.No.2 M/s.6th Sense Infrastructure private Limited had i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lease Deed between SIPCOT and M/s.6th sense Infrastructure Pvt Ltd. on 11 May 2005. 60-69 Order of allotment of plot in SIPCOT for M/s.6th Sense Infrastructure Pvt Ltd. 70-95 Original Lease Deed between SIPCOT and M/s.6th Sense Infrastructure Pvt Ltd. 11 May 2005 96 Incorporation certificate of M/s.6th Sense Infrastructure Pvt Ltd 97-102 Memorandum of Understanding for sale of equity shares of M/s.6th Sense Infrastructure Pvt Ltd. for ₹ 16 Crs. Singed by Lalit Mehta Mr.A.Nanda Kumar and Dinesh Chand Surana. 103-195 Original Share Certificates of M/s.6th Sense Infrastructure Pvt Ltd * In view of the seizure of these highly incriminating materials, Shri.Senthil was summoned once again and confronted with the seized materials. During the course of the enquiry he confirmed the seized MoUs were the ones which were executed by Smt. Sasikala with the vendors. The relevant portion of sworn statement Shri.Senthil dated 11.11.2017 is rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material (e) Particulars of the relevant panchnama (f) Annexure/S.No./Page number etc. (particulars to be specified) Incriminating documents found during the search and seizure proceedings in the case of V.K.Sasikala Group at Room No.302, Shylee Niwas Service Apartment, Nutech Washington, Old No.41, New No.76, Block II, 1st Main Road, CIT Nagar, Nandanam, Chennai on 18.11.2017 seized vide annexure ANN/KGA/VKS/LS/S-2 and the incriminating materials seized from the premises of Smt.Krishnapriya, daughter of Smt.Ilavarasi, at 181/69, Habibullah Road, T.Nagar, Chennai on 11.11.2017 vide annexure ANN/MS/KK/LS/S. 6 Relationship of the person referred in S.No.4 with the person referred to in S.No.2 Group concern of M/s Surana Corporation Ltd. 7 Satisfaction of the Assessing Officer of the person referred to in section 153A that the seized material referred to in S.No.5 with the person referred to in S.No.4 I am satisfied that the incriminating documents/loose sheets Seized vide annexure ANN/KGA/VKS/LS/S-2 ANN/MS/KK/LS/S contain (1) Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory pre-condition, would vitiate all subsequent assessment proceedings including the impugned notice. R2, in his reply to the petitioner s rejoinder, reiterates that the procedure followed by the respondents is in accordance with law. 35. There is no reference in any of the respondents pleadings to notice dated 14.06.2019. The respondents thus disavow notice dated 14.06.2019 and their case rests on the position that satisfaction notes were drawn up on 30.09.2019 and it was only parallel and pursuant thereto that the impugned notice under Section 153C dated 30.09.2019 was issued. In this context, attention is drawn to Sections 282 and 282A of the Act as well as Rules 127 and 127A of the Income Tax Rules, 1962 (Rules) to justify the issuance of the impugned notice and to state that proper procedure has been followed. 36. I am of the considered view that the issuance of the invalid notice dated 14.06.2019 does not compromise the assessment proceedings as, the invalid notice is one that does not exist in the eyes of the law and must thus be ignored. The provisions of Section 282 deal with service of notice in general terms and Section 282A with the authentication of notices f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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