Supreme Court upholds High Court decision on Income Tax Act assessments

Dy. Commissioner Of Income Tax Central Circle 20 Versus M/s U.K. Paints (Overseas) Ltd.

Dy. Commissioner Of Income Tax Central Circle 20 Versus M/s U.K. Paints (Overseas) Ltd. - [2023] 454 ITR 441 (SC) Issues Involved:
The judgment involves the assessment under Section 153-C of the Income Tax Act, 1961, the absence of incriminating material during search, the setting aside of assessments by the High Court, and the possibility of initiating re-assessment proceedings under Section 147/148 of the Act.

Assessment under Section 153-C:
The High Court found that no incriminating material was discovered during the search related to the Assessees. Consequently, the assessments under Section 153-C of the Act were rightly set aside by the High Court. The Revenue sought permission to initiate re-assessment proceedings under Section 147/148 based on certain observations in a recent decision. However, since no incriminating material was found in any of the cases, the High Court's decision to set aside the Assessment Orders was upheld by the Supreme Court. The appeals were dismissed as a result.

Initiation of Re-assessment Proceedings:
While the appeals were dismissed, the Supreme Court noted that the Revenue could initiate re-assessment proceedings in accordance with the law if permissible. The judgment emphasized that the Revenue's request to initiate re-assessment proceedings would be considered based on the legal provisions applicable.

Conclusion:
The Supreme Court upheld the High Court's decision to set aside the assessments under Section 153-C due to the absence of incriminating material. The appeals were dismissed, but the possibility of the Revenue initiating re-assessment proceedings under Section 147/148 was acknowledged, subject to legal provisions. The judgment concluded by dismissing all the appeals and allowing the Revenue to pursue re-assessment proceedings if legally permissible.