Sheel Trading Company Vs ACIT (ITAT Delhi)
ITAT Delhi held that based on incriminating materials unearthed during the course of search, proceedings under section 153C of the Income Tax Act needs to be initiated. Hence, initiation of proceedings u/s. 148 illegal and void ab initio.
Facts- The instant appeal filed by the assessee is directed against the order dated 22.02.2024 passed by the Commissioner of Income-Tax u/s. 143(3) r.w.s. 147 of the Income-tax Act. By way of an application dated 22.10.2024 the assessee has raised additional ground of appeal mainly challenging the assumption of jurisdiction by AO u/s. 148 r.w.s 147 of the Act based on incriminating materials unearthed during the search of M/s. Dhanuka Group. The case of the assessee is that the assessment could have been initiated in facts and circumstances of the matter, only invoking the provision Section 148 of the Act. Hence initiation of proceedings is bad in law and is liable to be quashed.
Conclusion- Held that the case is acceptable since admittedly re-opening has been done under Section 148 of the Act though on the basis of the incriminating materials unearthed during the course of search conducted on M/s. Dhanuka Group on 13.03.2019. In fact the proper course of action in such case of re-opening of the assessment of the assessee before us could have been invoking the provision of Sheel Trading 1566 & 1567/Del/2024 Section 153C of the Act. The judgment relied upon the Learned AR as mentioned hereinabove are also taken into consideration as those are on the identical facts and thus the re-opening of the assessment under Section 148 of the Act is found to be illegal and void ab initio and liable to be quashed.
