JCIT Vs RNT Metals Private Limited (ITAT Delhi)
Search Changes the Route — Once Search u/s 132 Happens, AO Cannot Continue on the Ordinary 143(3) Highway; Assessment Quashed for Not Following 147/148
Summary:
The Delhi ITAT dealt with an important jurisdictional issue arising under the post-01.04.2021 search assessment regime — whether, after a search u/s 132, the AO can continue with regular scrutiny proceedings & complete assessment u/s 143(3), or whether he is mandatorily required to follow the special route prescribed by sections 147/148.
The assessee, RNT Metals Pvt. Ltd., filed its original return for AY 2022-23 declaring income of ₹2.12 crore. Subsequently, a search & seizure action u/s 132 was conducted on 12.12.2022 at the business premises & residences of its directors. Jurisdiction was thereafter transferred to Central Circle-7, Delhi. However, instead of proceeding through section 148, the AO issued notice u/s 143(2) on 29.06.2023 & ultimately completed assessment u/s 143(3), making additions of approximately ₹1.92 crore & determining total income at ₹4.04 crore.
CIT(A) partly allowed the assessee’s appeal. Revenue therefore approached the ITAT, while the assessee filed a cross-objection raising a fundamental jurisdictional challenge to the very validity of the assessment.
Assessee’s Objection — After Search, 143(3) Was the Wrong Door
