The Kerala High Court has upheld the validity of proceedings conducted under Section 153C of the Income Tax Act, emphasizing that there is no mandatory requirement for a Director Identification Number (DIN) in the satisfaction note documented by the Assessing Authority.
Justice Dinesh Kumar Singh’s bench has dismissed the writ petition, stating, “It cannot be asserted that the contested notices and assessment orders lack legal jurisdiction, as contended by the petitioner’s counsel.”
According to Section 153C of the Income Tax Act, if a search is initiated against an individual under Section 132, or if books of account, documents, or assets are requisitioned under Section 132A after May 31, 2003, but on or before March 31, 2021, the Assessing Officer has the authority to request the return of income for the six preceding assessment years and subsequently reassess those returns.
The petitioner, who is the taxpayer, approached the court to challenge the assessment orders issued for the assessment years 2015-16 to 2020-21. This challenge was based on the argument that these assessment proceedings, carried out under Section 153C of the Income Tax Act, required the taxpayer to file an income tax return according to the stipulations of Section 153C.
The taxpayer contended that the assessment orders lacked jurisdiction and contravened the law. Consequently, the petitioner did not seek redress through the Appellate Authority but instead approached the Court, invoking Article 226 of the Indian Constitution to exercise its writ jurisdiction.
The taxpayer further asserted that, before issuing a tax notice under Section 153C to an individual other than the one subject to the search, the Assessing Officer was obliged to document a satisfaction note. However, the notices issued under Section 153C failed to specify or reference the satisfaction note recorded by the respondent, who was the individual subject to the search.
The satisfaction notes provided to the petitioner, in response to an email request, did not contain the Director Identification Number (DIN). Consequently, the petitioner argued that the entire proceedings were void of jurisdiction and illegal.
The assessing authority carefully reviewed the documents and expressed contentment with the issuance of notices under Section 153C. The petitioner had requested the satisfaction note, and the correspondence from the Assistant Commissioner of Income Tax, which furnished the satisfaction notes to the petitioner upon request, clearly displayed the Director Identification Number (DIN).
The petitioner argued that the absence of a DIN in the satisfaction notes rendered the entire proceedings null and void.
The court observed that the satisfaction note is an internal document crafted by the assessing authority and typically retained within their records. It is only when an assessee specifically requests the satisfaction note that it must be disclosed to them. Consequently, there is no necessity for a DIN number to be included in the satisfaction note maintained by the assessing authority.
The court, in rejecting the writ petition, advised the petitioner to consider the option of appealing the contested assessment orders if they so choose.
| Case Title | M/S. South Coast Spices Exports Pvt. Ltd Versus PCIT |
| Citation | WP(C) NO. 33771 OF 2023 |
| Date | 30.09.2022 |
| Counsel For Respondent | Jose Joseph SC IT |
| Kerala High Court | Read Order |
