2023 (4) TMI 1099 - AT - Income Tax

Tribunal upholds assessment proceedings for AY 2009-10, directs merit-based review. Appeals allowed, remanded for reconsideration.

The Tribunal upheld the validity of the assessment proceedings under section 153C for assessment year 2009-10, post-amendments to the Income Tax Act. It ... Validity of proceedings u/s 153C - amendments inserted in Section 153C vide Finance Act, 2014 - HELD THAT:- As per section 153C along with Section 153A of the Act, which was introduced by Finance Act, 2014 w.e.f. 01.10.2014, the six assessment years immediately preceding the AY relevant to the previous year in which search is conducted or requisition is made will come into the purview of block assessment years. In the present case the date of search being 10.03.2015 (previous year 2014-15) and the assessment year being 2015-16 the six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made are the AY 2014-15, 2013- 14, 2012-13, 2011-12, 2010-11, 2009-10. The year under consideration being 2009-10 indeed falls within the purview of law in view of the amendments inserted in Section 153C vide Finance Act, 2014. As date of search is post- amendment of Section 153A and 153C i.e. on 10.03.2015 therefore, CIT(A) has committed an error in quashing the assessment order. Accordingly, by upholding the validity of proceedings u/s 153C of the Act on the legal issue and we direct the ld CIT(A) to decide the appeal filed by the assessee on merit. Appeal filed allowed for statistical purposes. Issues involved:The issues involved in the judgment are related to the validity of the direction issued under section 150 of the Income Tax Act, 1961 and the correctness of the assessment order passed under section 153C read with section 143(3) of the Act for assessment years 2009-10 and 2010-11.Assessment Years 2009-10 and 2010-11:The assessee challenged the direction issued under section 150 of the Income Tax Act, 1961, by the ld. CIT (Appeals), claiming it to be illegal and outside the scope of the provisions. The Revenue raised substantive grounds of appeal, arguing that the ld. CIT(A) erred in quashing the assessment order passed under section 153C for AY 2009-10, prior to the amendment in the provisions. The ld. CIT(A) found that the notices issued for AY 2009-10 and 2010-11 were beyond the mandate of the law and quashed the assessment order.Legal Analysis:The Tribunal examined the amendments made to section 153A and 153C of the Act by the Finance Act, 2014, which expanded the block assessment years. Considering the search date and assessment year, it was determined that the AY 2009-10 fell within the purview of the law post-amendments. The Tribunal disagreed with the ld. CIT(A)'s reliance on previous judgments and held that the assessment order should not have been quashed. The Tribunal directed the ld. CIT(A) to decide the appeal on merit after upholding the validity of proceedings under section 153C.ITA No. 1557-1558/Del/2019:The assessee challenged the direction issued under section 150(1) of the Act by the ld. CIT(A) to examine the case independently under sections 147/148 for AY 2009-10 and 2010-11. Since the Tribunal upheld the validity of invoking section 153C in the assessment proceedings, the appeal challenging the direction under section 150(1) was allowed. The direction given by the ld. CIT(A) was quashed, and the matter was remanded for de novo consideration.Conclusion:The Tribunal allowed the appeal filed by the Revenue in ITA No. 2829/Del/2019 for statistical purposes, upholding the validity of proceedings under section 153C. The appeals filed by the assessee in ITA No. 1557 and 1558/Del/2019 were allowed, and the appeal filed by the Revenue was dismissed. The direction issued under section 150(1) was quashed, and the matter was remanded for further consideration on merits.