Maan Steel & Power Limited Vs DCIT (ITAT Kolkata)
Section 148 Reassessment Based on Pre-2021 Third-Party Search Material Invalid; Section 153C Mandatory: ITAT Kolkata
The appeals before the Income Tax Appellate Tribunal (ITAT), Kolkata, arose from cross appeals filed by both the Revenue and the assessee against the orders of the Commissioner of Income-tax (Appeals) for Assessment Years (AYs) 2018-19 and 2019-20. The Tribunal first condoned an 11-day delay in the Revenue’s appeal for AY 2019-20 after considering the explanation that the delay occurred due to the time taken in obtaining administrative approval.
During the hearing, the assessee sought admission of an additional legal ground challenging the jurisdiction of the Assessing Officer (AO). The assessee contended that the reassessment proceedings initiated under Sections 147/148 were invalid because they were based entirely on documents seized during a search conducted on a third party, namely the Majhi Group, on 5 November 2020. According to the assessee, if the seized material allegedly belonged or related to it, the proceedings ought to have been initiated under Section 153C instead of Section 148. The Tribunal admitted this additional ground, observing that it raised a pure question of law requiring no further factual verification and could therefore be raised for the first time before the appellate authority.
