Swagat Infrastructure Private Limited Vs DCIT (Gujarat High Court)
The Gujarat High Court allowed a writ petition challenging an assessment order and consequential demand notice for Assessment Year 2011–12, holding that the assessment was barred by limitation under the Income-tax Act, 1961.
The dispute arose from proceedings initiated under section 153C of the Act against the petitioner, based on a search conducted on 04.09.2013 in the case of a third party, H.N. Safal Group. During the search, certain materials were seized, and a satisfaction note was recorded by the Assessing Officer of the searched person on 18.08.2017. These materials were forwarded to the Assessing Officer having jurisdiction over the petitioner and were received on 28.08.2017, falling in Financial Year 2017–18.
Under the first proviso to section 153B(1) of the Act, which governs limitation for assessments under sections 153A and 153C, the last date for framing the assessment in the petitioner’s case was 31.12.2018. However, before the expiry of this period, the petitioner challenged the notice issued under section 153C, and this Court granted interim relief on 20.12.2018. As a result, only eleven days of the original limitation period remained when the proceedings were stayed.
The controversy regarding validity of such proceedings ultimately reached the Supreme Court, which settled the issue in favour of the Income Tax Department by its judgment dated 06.04.2023 in ITO vs. Vikram Sujitkumar Bhatia. The said judgment was received by the jurisdictional Assessing Officer on 16.05.2023. Following the Supreme Court decision, the Assessing Officer proceeded to complete the assessment and passed the impugned assessment order on 30.04.2024.
