2023 (6) TMI 1019 - AT - Income Tax

Validity of proceedings initiated u/s 153C - HELD THAT - There is no tax effect involved in the years under consideration since the assessment u/s 153C r/w section 143(3) has been concluded at the returned income. However, as per the assessee, adjudication on the validity of initiation of proceedings u/s 153C is relevant for the subsequent assessment year(s), which are currently pending before the learned CIT(A). We find that adjudication on the validity of initiation of proceedings u/s 153C in favour of either party, in the present appeals, will have no impact on the total assessed income, as the AO has accepted the total income as declared by the assessee in his return of income without making any addition. Thus we are of the considered opinion that the various grounds raised by the assessee challenging the initiation of proceedings under section 153C of the Act, in the present appeals, are rendered academic and therefore, are kept open. The findings of CIT(A) upholding the initiation of proceedings u/s 153C do not impact the computation of the total income of the assessee. Such being the circumstances, we are of the view that the entire exercise by the learned CIT(A) in adjudicating the various grounds raised by the assessee on the validity of initiation of proceedings under section 153C of the Act is merely academic, with no other relevance for the assessment years under consideration. We direct that the findings of the learned CIT(A), in the impugned orders, on the validity of initiation of proceedings u/s 153C of the Act shall not have any precedential value while deciding appeal(s), which are currently pending before the learned CIT(A). Decided against assessee.

Summary

Issues Involved:
The judgment involves challenges to impugned orders under the Income Tax Act, 1961 for multiple assessment years, specifically focusing on the validity of proceedings initiated under section 153C of the Act.

Validity of Proceedings under Section 153C:
The appeals were filed by the assessee challenging orders passed under section 250 of the Income Tax Act, pertaining to assessment years 2011-12 to 2015-16. The primary contention raised by the assessee was the validity of proceedings initiated under section 153C of the Act. The search and seizure action conducted led to the centralization of the assessee's case for coordinated investigation. The satisfaction note under section 153C was received by the Assessing Officer, and notices were issued to the assessee for the relevant assessment years. Despite no tax effect due to assessments being concluded at the returned income, the assessee argued that the validity of the proceedings is crucial for pending assessment years. The Assessing Officer had accepted the total income as declared by the assessee without any additions. The Tribunal opined that the grounds challenging the initiation of proceedings under section 153C were rendered academic, with no impact on the total assessed income. The findings of the Commissioner of Income Tax (Appeals) on the validity of the proceedings were deemed to be of no precedential value for pending appeals. The Tribunal dismissed the grounds raised by the assessee as infructuous, and all appeals were ultimately dismissed.

Conclusion:
The Tribunal, after considering submissions and perusing the material on record, dismissed the appeals by the assessee challenging the impugned orders related to the validity of proceedings initiated under section 153C of the Income Tax Act for the assessment years 2011-12 to 2015-16. The Tribunal found that the initiation of proceedings did not impact the computation of the total income, as no additions were made by the Assessing Officer. The Tribunal held that the findings on the validity of the proceedings were academic and directed that they would not have precedential value for pending appeals. The assessee was given the liberty to approach the Tribunal in the future if the issue had a bearing on subsequent years. The Tribunal concluded by dismissing all the appeals by the assessee.