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IN THE HIGH COURT OF DELHI
Manmohan, Manmeet Pritam Singh Arora, JJ.
Principal Commissioner of Income Tax (Central) - Appellant
Versus
Panchmukhi Management Services Pvt. Ltd. - Respondent
ITA 320 of 2022
Decided On : 26-09-2022
The return for AY 2009-10 could not be reopened under the Income Tax Act as the six-year limitation applies, referencing precedents that establish the proper interpretation of reopening provisions.
Headnote:(A) Income Tax Act, 1961 - Section 153A and 153C - Challenge to the ITAT order - The ITAT erred in finding no incriminating material; original share certificates indicated bogus entities. - Judgment references noted include CIT v. RRJ Securities Ltd., (2016) 380 ITR 612 and PCIT vs Sarwar Agency (P.) Ltd., (2017) 397 ITR 400. (Paras 2-4)
(B) Assessment Reopening - Return for AY 2009-10 could not be reopened based on the six-year limitation referenced in applicable law. (Para 5)
Facts of the case:
The appeal arose from the ITAT's ruling regarding the search findings at the issuing company's premises reflecting bogus entities linked with share capital.
Findings of Court:
The return for AY 2009-10 was deemed valid and could not be reopened as no grounds existed under the law.
Issues: Whether the ITAT erred in its assessment of incriminating materials connecting the case to the reopening of assessments for AY 2009-10.
Ratio Decidendi: The court held that the return could not be reopened as the six-year timeframe for assessments is governed by the precise legal framework established, as referenced in earlier judgments.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. jurisdiction of itat and appeal context. (Para 1) |
| 2. argument against itat's findings on incriminating evidence. (Para 2 , 3) |
| 3. interpretation of assessment years under section 153c. (Para 4) |
| 4. dismissal of appeal due to lack of substantial question of law. (Para 5) |
JUDGMENT
Manmohan, J. (Oral)--Present Income Tax Appeal has been filed challenging the order dated 28th February, 2022 passed by the Income Tax Appellate Tribunal (`ITAT') in ITA No. 765/Del/2018 for the Assessment Year 2009-10.
2. Learned counsel for the appellant states that the ITAT has erred in holding that no incriminating material was found in the search, whereas the original copies of share certificates pertaining to share capital and premium allotted to investor companies were found at the premises of issuing company itself instead of investor company's premises evidencing, that, the investor companies were bogus/accommodation entry providing entities.
3. He emphasises that in the present case, there is a live link between the additions in question and the incriminating material.
4. A perusal of the paper book reveals that in the present case, the satisfaction note in the case of the assessee was recorded on 29th January, 2016, therefore the six year period prior to Assessment Year of search i.e. AY 2015-16 will be Assessment Years 2010-11 to 2015-16 in view of the judgments of this Court in the cases of CIT v. RRJ Securities Ltd., (2016) 380 ITR 612 and PCIT vs Sarwar Agency (P.) Ltd., (2017) 397 ITR 400, wherein it has been held that the proceedings by virtue of Section 153C(1) of the Act would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. The learned predecessor Division Bench, in the aforementioned cases, further observed that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the Assessing Officer of the Assessee.
5. Keeping in view the aforesaid position of law, this Court is of the opinion that in the facts of the present case, the return of income for the assessment year 2009-10 could not have been reopened. Consequently, no substantial question of law arises for consideration in the present appeal and accordingly the same is dismissed.
