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2017 Supreme(Del) 2275
IN THE HIGH COURT OF DELHI AT NEW DELHI
S.MURALIDHAR, PRATHIBA M. SINGH, JJ.
Pr. Commissioner Of Income Tax Central-3 - Appellant
Versus
Ppc Business And Products Pvt. Ltd. - Respondent
ITA 290, 605, 606, 607, 608, 609, 610, 637, 638, 639, 640, 641, 850 of 2016
Decided on : 17-07-2017
For the Appellant :Mr. Rahul Chaudhary, Sr.Standing Counsel with Ms. Lakshmi Gurung, Advocate
For the Respondent:Mr. Shashwat Bajpai and Mr. Sharad Agarwal, Advocates
The main legal point established in the judgment is the interpretation and application of the limitation period for completing assessments under the Income Tax Act, particularly in cases where the search has concluded on a specific date.
Headnote:
Income Tax Act - Revenue Appeals - Section 260A - Section 153A, Section 143(3), Section 153C - 153B
Fact of the Case:
The appeals by the Revenue under Section 260A of the Income Tax Act, 1961 (‘the Act’) arise out of similar set of facts involving similar questions of law and are accordingly disposed of by this common judgment. The background facts involve a search conducted under Section 132(1) of the Act in the office premises of various entities.
Finding of the Court:
The Court found that the assessment framed by the Assessing Officer (AO) under Section 153A, Section 143(3), and Section 153C was barred by limitation as the search concluded on a specific date, and subsequent visits did not result in new findings. The Court dismissed the appeals by the Revenue as no substantial question of law arose from the impugned order of the ITAT.
Issues: The issues involved the legality of the assessment framed by the AO under various sections of the Income Tax Act and the applicability of the limitation period for completing the assessment.
Ratio Decidendi: The Court relied on the interpretation of Section 153B and relevant case law to conclude that the assessment was barred by limitation as the search had concluded on a specific date, and subsequent visits did not result in new findings.
Final Decision: All the appeals were dismissed by the Court, and no orders as to costs were made.
Certainly. Based on the provided legal document, the main legal point established is the interpretation and application of the limitation period for completing assessments under the Income Tax Act, particularly in cases where a search has concluded on a specific date. The court clarified that the assessment is barred by limitation if the search concluded before the assessment deadline, and subsequent visits that do not uncover new findings do not extend this period. The assessment must be completed within the stipulated time frame from the date the search was deemed to have concluded, as evidenced by the final panchnama indicating the conclusion of the search. The judgment emphasizes that merely recording a panchnama on a later date stating that the search was "finally concluded" does not automatically extend the limitation period, especially if no new material was found during that visit. Furthermore, the court highlighted that the limitation period is linked to the last day of the search or seizure activity, and repeated visits without new findings do not reset or extend this period. This interpretation ensures that assessments are conducted within a defined statutory timeframe, safeguarding the taxpayer's right to a timely assessment and preventing indefinite extensions based on procedural formalities.
S. Muralidhar, J.
1.These appeals by the Revenue under Section 260A of the Income Tax Act, 1961 (‘the Act’) arise out of similar set of facts involving similar questions of law and are accordingly disposed of by this common judgment.
2. In five of these appeals i.e., ITA Nos. 605, 606, 607, 608 and 609 of 2016 for the Assessment Years (‘AYs’) 2001-02, 2002-03, 2004-05, 2006-07 and 2007-08, respectively, the Respondent/Assessee is Surya Vinayak Industries. These appeals are directed against the common impugned order dated 6th October, 2015 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA Nos. 3158-3162/Del./2011.
Questions urged
3. In ITA Nos. 605-608 of 2016, the questions of law that are sought to be urged by the Revenue are as under:
(i) Whether the ITAT erred in law and on facts in holding that the assessment framed by the Assessing Officer (AO) under Section 153A is barred by limitation?
(ii) Whether the order passed by the ITAT is perverse and not sustainable under law?
In ITA No. 609/2016 there is slight change in question (i) above inasmuch as the order of the AO is under Section 143 (3) of the Act.
4. Two of the appeals i.e. ITA Nos. 637 and 638 of 2016 are against the Respondent/Assessee, Sanjay Jain, for AYs 2005-06 and 2007-08 arising out of the common order dated 6th October, 2015 passed by the ITAT in ITA Nos. 5325/Del/2013 and 4753/Del/2011, respectively. The question of law urged in these two appeals by the Revenue are identical to the questions raised in the appeals against Surya Vinayak Industries.
5. There are four appeals viz. ITA Nos. 610, 641, 640 and 639 of 2016 for the AYs 2001-02, 2004-05, 2005-06 and 2006-07, respectively, involving the Respondent/J.H. Business India Pvt. Ltd. These appeals are also directed against the common order dated 6th October, 2015 passed by the ITAT in ITA Nos. 3173-3176/Del/2011.
6. There is a fifth appeal filed by the Revenue (ITA 850/2016) against the same common order passed by the ITAT in ITA No. 3177/Del/2011 for AY 2007-08. However, that appeal is stated to be still lying in defect and has not been listed before the Court.
7. The common questions of law urged by the Revenue in these four appeals involving J.H. Business India Pvt. Ltd. read as under:
(iii) Whether the ITAT erred in law and on facts in holding that the assessment framed by AO under Section 153C read with Section 143(3) is barred by limitation as per Section 153B of the Act?
(iv) Whether the order passed by the ITAT is perverse and not sustainable under law?
8. ITA No. 290/2016 filed by the Revenue against the Assessee, PPC Business and Products Pvt. Ltd., is directed against the order dated 14th August, 2015 passed by the ITAT in ITA No. 226/Del/2012 for AY 2006-07. The questions of law urged by the Revenue in these appeals read as under:
(v) Whether learned ITAT erred in allowing the additional ground as raised by the Assessee in regard to the limitation of Assessment made under Section 153C ignoring the fact that same has not been raised before the Appellate Authority?
(vi) Whether the ITAT erred in allowing the additional ground raised by the Assessee in regard to limitation of assessment made under Section 153C of the Act by following its own finding the case of ACIT v. J.H. Invest P. Ltd. being ITA No. 1297-1297/Del/2011 by wrongly applying Section 153B (1) for the assessment under Section 153B (1) for assessment under section 153A ignoring the fact that the present case is related to Section 153C and the time limit for completion of Assessment is 31st December, 2009 which is within the time limit for the assessment order dated 24th December, 2009.
Background facts
9. The background facts in these appeals are that on the basis of Authorization dated 20th March, 2007 issued under Section 132(1) of the Act, a search was commenced on 21st March, 2007 in the office premises of Rim Zim Valley Products Pvt. Ltd., J.H. Invest Pvt. Ltd., Aakriti International; M/s JH Business and Products Pvt. Ltd. and Su
