2022 (2) TMI 1098 - HC - Income Tax

Assessment u/s 153A - Whether No incriminating material was found in the search on the assessee conducted by the Officers under Section 132? - HELD THAT - There is distinction between proceedings abated and the proceedings which are concluded , as evident from bare reading of Section 153 A of the Act, 1961. Since assessment proceedings of the respondent assessees fall under the category concluded , therefore, provisions of Section 153 A could not have been invoked unless some specific incriminating material was found in the search. Since no incriminating material was found in the search conducted on the assessee, therefore, reassessment proceedings under Section 153 A of the Act could not have been initiated by the Assessing Officer and such initiation of proceedings was wholly without jurisdiction.- Decided in favour of assessee.

Issues:
1. Interpretation of Section 153 A of the Income Tax Act, 1961.
2. Existence of incriminating material for invoking reassessment under Section 153 A.
3. Jurisdiction of assessing authority in completed assessment proceedings.
4. Distinction between "abated" and "concluded" proceedings under Section 153 A.

Analysis:

1. Interpretation of Section 153 A:
The judgment involves a dispute regarding the interpretation of Section 153 A of the Income Tax Act, 1961. The Appellant argues that the Tribunal's finding, which stated that no incriminating material was found during the search, leading to the conclusion that reassessment under Section 153 A cannot be initiated, is incorrect and against the provisions of the Act. The Appellant relies on various judgments to support their interpretation, emphasizing the necessity of incriminating material for invoking Section 153 A.

2. Existence of Incriminating Material:
The Respondent asserts that no incriminating material was discovered during the search conducted under Section 132 of the Act. They argue that since no such material was found, the provisions of Section 153 A cannot be invoked. The Respondent contends that as the original assessment proceedings were already completed under Section 143(3) of the Act, the assessing authority lacked jurisdiction to reassess without any specific incriminating material. The Respondent cites judgments from the Delhi High Court to support their position.

3. Jurisdiction in Completed Assessment Proceedings:
The Respondent further argues that the Assessment Orders passed under Section 153 A were lawfully annulled by the Income Tax Appellate Tribunal because the assessing authority did not have the jurisdiction for reevaluation or reappraisal of assessments that were already concluded. They stress the distinction between "abated" and "concluded" proceedings under Section 153 A, asserting that as the assessment proceedings were concluded, the initiation of reassessment without incriminating material was without jurisdiction.

4. Distinction between "Abated" and "Concluded" Proceedings:
The Respondent highlights the importance of distinguishing between proceedings that are "abated" and those that are "concluded" under Section 153 A. They argue that since the assessment proceedings of the respondent assessees were in the category of "concluded," the provisions of Section 153 A could not have been invoked without specific incriminating material. The Respondent contends that the initiation of reassessment proceedings without such material was entirely without jurisdiction. They cite judgments from the Delhi High Court to support their argument.

In conclusion, the judgment revolves around the interpretation of Section 153 A of the Income Tax Act, 1961, the presence of incriminating material for reassessment, the jurisdiction of the assessing authority in completed assessment proceedings, and the distinction between "abated" and "concluded" proceedings under Section 153 A. The arguments presented by both parties are supported by relevant legal precedents, and the matter is scheduled for further hearing to conclude the proceedings comprehensively.

← Previous Next →