Notice issued under section 153A calling upon assessee to file returns for earlier six assessment years cannot be challenged on ground that it would cause certain degree of hardship to assessee

Section 153A, read with section 132, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of search or requisition -Filing of return for six assessment years

• Whether once there is a search, Assessing Officer has no option but to call upon assessee to file returns of income for earlier six assessment years - Held: Yes. 
• Whether, therefore, notice issued under section 153A calling upon assessee to file returns for those years, cannot be challenged merely on ground that it would cause certain degree of hardship to assessee - Held: Yes.

Facts

• The assessee was a non-resident. He owned a house property in India. A search was conducted in assessee's premises in course of which a panchnama was drawn up inventorising the materials seized.
• Pursuant to search, as required by section 153A, the Assessing Officer issued notices for the past six assessment years calling upon the assessee to file returns of income.
• The assessee filed instant writ petition contending that the search as well as the notices issued under section 153A would only result in extreme harassment to him who was required to file returns for the past six years and face the cumbersome assessment proceedings.

HELD

• Section 153A is couched in mandatory language which implies that once there is a search, the Assessing Officer has no option but to call upon the assessee to file the returns of the income for the earlier six assessment years. It is not merely the undisclosed income that will be brought to tax in such assessments, but the total income of the assessee, including both the income earlier disclosed and income found consequent to the search, would be brought to tax.
• The normal provisions relating to inquiry, affording opportunity, etc., which are provided for in sections 142, 143, etc. are to be followed by the Assessing Officer. There is also a time limit for completion of the assessment under section 153A which is prescribed in section 153B.
• In these circumstances the assessee's contention that he would be put through unnecessary harassment is a non-starter. He has to face the assessment proceedings and participate in them; in case he has evidence or material to show that he has not earned any income which is not disclosed to the income-tax authorities or to rebut the material gathered during the search, it is perfectly open to him to do so. It is his right which is well protected by various provisions of the Act. Appeal remedies are also available against the assessment framed. [Para 7]
• In the instant case the entire gamut of issues relating to the recording of satisfaction, and facts pertaining thereto were canvassed to suggest that the notice was issued mindlessly.
• While the Court is conscious of certain degree of hardship which would occur to any assessee whose premises are searched, that does not afford it any higher right or confer greater remedies, or expand the scope of a limited jurisdiction under article 226. The present petition is therefore, speculative, and misconceived. It is accordingly, dismissed. [Paras 7 and 8]

Madugula Venu v. Director of Income-tax (DELHI HIGH COURT)