No Requirement To Have A DIN Number In Satisfaction Note Recorded By Assessing Authority: Kerala High Court Upholds Section 153C Proceedings

The Kerala High Court has upheld the proceedings under Section 153C of the Income Tax Act and noted that there is no requirement to have a DIN number in the satisfaction note recorded by the Assessing Authority.

The bench of Justice Dinesh Kumar Singh has dismissed the writ petition and stated, “It cannot be said that the impugned notices and assessment orders are without jurisdiction as submitted by the learned counsel for the petitioner.”

As per Section 153C of the Income Tax Act where a search is initiated against a person under Section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31.05.2003 but on or before 31.03.2021, then the Assessing Officer can seek the return of income of six preceding assessment years and shall re-assess such returns.

The petitioner/assessee has approached the court against the assessment orders because the proceedings in issuing the notices under Section 153C of the Income Tax Act for the assessment years 2015-16 to 2020-21 require them to file a return of income on the basis of the provisions of Section 153C.

The assessee argued that the assessment orders are without jurisdiction and against the law. Therefore, the petitioner has not approached the Appellate Authority and has approached the Court, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India.

The assessee contended that the assessing officer is required to record a satisfaction note before issuing notice under Section 153C to a person other than the searched person. The notice issued under Section 153C has not mentioned or specified the satisfaction note recorded by the respondent, the searched person. The satisfaction notes supplied to the petitioner in pursuance of the email sent by the petitioner do not bear the DIN number. Therefore, the whole proceedings are without jurisdiction and illegal.

The assessing authority has examined the documents and recorded satisfaction with issuing notices under Section 153C. The petitioner has demanded the satisfaction note, and the letter issued by the Assistant Commissioner of Income Tax, by which the satisfaction notes have been provided to the petitioner on his demand, would disclose that the letter bears the DIN number.

The petitioner submitted that since the satisfaction notes do not bear the DIN number, the whole proceedings are invalid.

The court noted that the satisfaction note is a document prepared by the assessing authority that is kept in the file, and unless an assessee demands the satisfaction note, it is not required to be provided to the assessee. Therefore, there is no requirement to have a DIN number in the satisfaction note recorded by the assessing authority.

The court, while dismissing the writ petition, stated that the petitioner may avail of the remedy of appeal against the impugned assessment orders if so advised.

Counsel For Petitioner: Preetha S. Nair

Counsel For Respondent: Jose Joseph

Case Title: M/S. South Coast Spices Exports Pvt. Ltd Versus PCIT

Citation: 2023 LiveLaw (Ker) 608

Case No.: WP(C) NO. 33771 OF 2023

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