2024 (10) TMI 927 - AT - Income Tax

Assessment proceedings under sections 147/148 cannot be initiated when search under section 132 occurs for years covered under section 153A

DCIT, Cirlce-10 (1), New Delhi Versus Anjani Kumar Goenka

DCIT, Cirlce-10 (1), New Delhi Versus Anjani Kumar Goenka - TMI Issues Involved:1. Legality of the assessment proceedings initiated under Section 148 instead of Section 153A of the Income Tax Act.2. Jurisdictional validity of the assessment order passed under Section 143(3) read with Section 147.3. Applicability of judicial precedents in determining the correct procedural course for assessments following a search operation.Issue-wise Detailed Analysis:1. Legality of Assessment Proceedings under Section 148:The primary issue in this case revolves around whether the proceedings initiated under Section 148 were legally valid, given that a search operation under Section 132 had already been conducted. The tribunal noted that the assessment proceedings should have been initiated under Section 153A, which specifically deals with assessments following a search or requisition. The tribunal emphasized that once a search operation takes place, any assessment for the years covered by Section 153A must be conducted under this section alone, rather than under Section 148. The tribunal highlighted that the reasons for reopening the assessment under Section 147/148 were based on evidence found during the search, thus mandating the use of Section 153A.2. Jurisdictional Validity of the Assessment Order:The tribunal scrutinized the jurisdictional validity of the assessment order passed under Section 143(3) read with Section 147. It was determined that the assessment order was a nullity due to the incorrect invocation of jurisdiction under Section 148 instead of Section 153A. The tribunal cited several judicial precedents, including the Hon'ble Delhi High Court's decision in PCIT v. OJJUS Medicare Private Limited, which clarified that the provisions of Sections 153A and 153C are distinct from the ordinary reassessment provisions under Section 148 and should operate independently. The tribunal further noted that the assessment order was based on evidence found during the search, reinforcing the necessity for proceedings under Section 153A.3. Applicability of Judicial Precedents:The tribunal relied on various judicial pronouncements to support its decision. It referred to cases such as State Bank of India v. DCIT and Vashdev G. Adnani v. ACIT, which established that Section 153A has an overriding effect on the regular assessment provisions when a search operation is conducted. The tribunal also distinguished the present case from PCIT v. Meeta Gutgutia, noting that the facts were different as the statement in the current case was recorded under Section 132(4) and incriminating material was found during the search. The tribunal concluded that the appropriate legal course was to issue a notice under Section 153A, and not under Section 148, thereby affirming the decision of the CIT(A) to annul the assessment order.In conclusion, the tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision that the assessment proceedings initiated under Section 148 and the subsequent assessment order were without jurisdiction and legally invalid. The tribunal reinforced the principle that search-related assessments must adhere strictly to the procedural framework established under Section 153A.