Montage Enterprises Pvt. Ltd. Vs DCIT/ACIT (ITAT Delhi)
Material Facts
The assessee and the Revenue filed cross appeals against the order of the Commissioner of Income Tax (Appeals)-3, Noida dated 30.07.2025 for Assessment Year 2022-23 arising from proceedings under Section 143(3) of the Income-tax Act, 1961. The assessee, engaged in the business of manufacturing and sale of flexible packaging material, filed its return declaring a loss of ₹64,53,88,702. The return was selected for scrutiny. Subsequently, a search under Section 132 and a survey under Section 133A were conducted on 21.02.2023. Thereafter, the Assessing Officer completed the assessment under Section 143(3) on 30.03.2024 making various additions and disallowances, which were partly sustained by the CIT(A).
Procedural History
The assessee challenged the validity of the assessment on the ground that, following the search under Section 132, the assessment ought to have been completed under Section 148 after obtaining the approval contemplated under Section 148B instead of under Section 143(3). The Revenue defended the assessment, contending that the scrutiny proceedings were already pending when the search took place and, therefore, the Assessing Officer was justified in completing the assessment under Section 143(3).
Legal Issues
The Tribunal considered:
- Whether, after a search under Section 132, the assessment for AY 2022-23 could validly be completed under Section 143(3), or whether it was required to proceed under Section 148.
- The appropriate gross profit (GP) rate to be adopted if the assessment survived.
Relevant Statutory Provisions
