Case Law Details
PCIT Vs King Buildcon Pvt. Ltd (Supreme Court of India)
In a significant decision, the Supreme Court of India has ruled in the case of PCIT Vs King Buildcon Pvt. Ltd that reassessment proceedings should not be conducted on completed/unabated assessments if no incriminating material is found during a search.
The ruling provides clarity on the circumstances under which completed or unabated assessments can be reopened. The Supreme Court’s decision reaffirms the ruling in the case of Municipal Commissioner of Income Tax v. Abhisar Buildwell Pvt. Ltd. The court acknowledged that the Assessing Officer (AO) may reopen assessments under Sections 147/148 of the Income Tax Act, but such action must be contingent on the fulfillment of conditions specified under these sections. Therefore, without any incriminating material discovered during a search, no reassessment proceedings should be conducted.
This Supreme Court ruling is a significant precedent for reassessment proceedings under the Income Tax Act. It reinforces the importance of finding incriminating material during a search to conduct reassessment proceedings on completed or unabated assessments. This decision provides a clearer path for assessing officers and offers greater certainty to taxpayers regarding the conditions under which their assessments may be reopened.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Leave granted.
2. This appeal is directed against the final judgment and order dated 22.4.2022 passed by the High Court of Delhi at New Delhi in ITA No. 100/2022.
3. It is submitted by the learned counsel on both sides that the issue involved in this appeal is squarely covered by the decision of this Court in Municipal Commissioner of Income Tax v. Abhisar Buildwell Pvt. Ltd. [(2023) SCC Online SC 481]. In the light of the dictum laid down thereunder and in view of the indisputable fact that during the search no incriminating material was found, this appeal must fail. Consequently, it is dismissed.
4. However, in view of the decision in Abhisar’s case (supra), completed/unabated assessments could be re-opened by the AO in exercise of powers under Sections 147/148 of the Income Tax Act subject to fulfilment of the conditions envisaged under Sections 147/148 of the Income Tax Act and hence, such powers are saved in terms of the said judgment.
5. Subject to the above, the appeal stands dismissed.
6. Pending application(s) shall also stand disposed of.
