Indian National Congress Vs DCIT (Delhi High Court)
Approaching court few days before expiry of time for completion of assessment u/s. 153C not justifiable: Delhi HC
Delhi High Court held that petitioner has approach the court only a few days before the time for completion of assessment u/s. 153C of the Income Tax Act would expire. Accordingly, court held that there is no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution.
Facts- Vide the present petition, the petitioner mainly challenges the initiation of proceedings u/s. 153C of the Income Tax Act. Petitioner alleges that the respondent seeks to undertake an assessment pertaining to AYs‘ 2014-15 to 2020-21. However, the assessment which is proposed to be undertaken for AYs 2014-15, 2015-16 and 2016-17 would be barred by the period of limitation as raised by virtue of the First Proviso to Section 153C of the Act.
Petitioner further alleges that in the absence of an explicit reference to the incriminating material or asset that may have been discovered year wise and a failure to establish a connection between such material and the total income of each of the six AYs‘, invalidates the initiation of action u/s. 153C of the Act.
Conclusion- The Section 153C notice was issued on 07 March 2023, whereas, the Satisfaction Note appears to have been provided to the petitioner on 28 and 30 June 2023. These writ petitions came to be preferred long thereafter on 19 March 2024. We take note of the statutory timeframes stipulated under Section 153B of the Act for completion of assessment proceedings and more particularly the Second and Third Proviso‘s which mandate assessment itself being completed within twelve months from the time when the books of account or material is handed over to the AO of the non-searched person. This would mean that in the present case and taking the date of handing over or recordable of satisfaction as constituting the date from which that period is liable to be reckoned, the assessment is liable to be completed by 31 March 2024.
Held that the writ petitioner has thus chosen to approach this Court only a few days before the time for completion of assessment would expire and at the proverbial fag end of the proceedings. We consequently find no justification to interdict the assessment proceedings at this belated stage by invoking our jurisdiction under Article 226 of the Constitution. However and whether the asserted delay in commencement of proceedings would be fatal to the assessment itself is a question that we leave open to be urged at an appropriate juncture.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. These three writ petitions pertaining to Assessment Year1 2014- 15 [W.P.(C) 4268/2024], AY 2015-16 [W.P.(C) 4265/2024], and AY 2016-17 [W.P.(C) 4264/2024], lay challenge to the initiation of proceedings under Sec-tion 153C of the Income Tax Act, 19612 and thus impugn the notice dated 07 March 2023 referable to that provision. The petitioner, in addition, also im-pugns the orders dated 22 September 2023 as well as 01 March 2024 and 06 March 2024 passed by the respondents disposing of various objections which came to be submitted by the petitioner. For the sake of convenience, reference to facts and the position of material before us would be as appearing on P.(C) 4268/2024 being Item 93 on our board when we reserved orders.
2. The Section 153C action is based on searches which were conducted upon four individuals in April, 2019. According to the writ petitioner, on the basis of the material which was gathered in the course of those searches, the Assessing Officer3 of the searched persons also drew corresponding Satisfaction Notes for initiation of proceedings against the petitioner in terms of Section 153C of the Act on various dates the details whereof are set out in a tabular form as under:-
