Case Number: ITA 1128/DEL/2021
Appellant: Ecstasy Buildcon Private Limited, Ghaziabad
Respondent: DCIT, CC, Ghaziabad
Assessment Year: 2017-18
Case Filed on: 2021-09-14
Order Type: Final Tribunal Order
Date of Order: 2022-10-10
Pronounced on: 2022-10-10
The present case involves Ecstasy Buildcon Pvt. Ltd. (the appellant) and the Deputy Commissioner of Income Tax, Central Circle, Ghaziabad (the respondent). The case pertains to the assessment year 2017-18 and was filed on September 14, 2021. The final order was pronounced on October 10, 2022.
The appeals filed by Ecstasy Buildcon Pvt. Ltd. and the Revenue involved multiple issues of common nature. Hence, all appeals were heard together and disposed of by a consolidated order for brevity and convenience.
The primary issue raised by the appellant was the jurisdiction of the Assessing Officer (AO) under Section 153C of the Income Tax Act, 1961. The appellant contended that the proceedings were initiated without proper satisfaction being recorded by the AO and that no incriminating material was found during the search which could justify the initiation of proceedings under Section 153C.
The AO made several additions, including:
The appellant raised several grounds of appeal, including:
The Tribunal observed that the AO’s initiation of proceedings under Section 153C was based on the satisfaction note that recorded the discovery of certain invoices and documents related to the appellant during the search. However, the Tribunal noted that the satisfaction note was undated and the documents were not incriminating in nature.
The Tribunal referred to the Supreme Court’s ruling in the case of Singhad Technical Society, which held that the existence of incriminating material is a jurisdictional fact for initiating proceedings under Section 153C. The Tribunal also relied on the Delhi High Court’s decision in the case of Kabul Chawla, which stated that no addition can be made in the absence of incriminating material for completed assessments.
Based on the above observations, the Tribunal concluded that the AO did not have valid jurisdiction to initiate proceedings under Section 153C as the documents found were not incriminating. Consequently, the additions made by the AO were not sustainable.
The Tribunal directed the AO to delete the additions and allowed the appeal in favor of Ecstasy Buildcon Pvt. Ltd.
This case highlights the importance of adhering to procedural requirements and ensuring that proper jurisdiction is established before initiating proceedings under Section 153C of the Income Tax Act. The Tribunal’s ruling reinforces the need for incriminating material to justify additions in completed assessments.
In conclusion, the Tribunal’s order in favor of Ecstasy Buildcon Pvt. Ltd. emphasizes the necessity of due process and fair assessment in tax proceedings, setting a precedent for similar cases in the future.
Ecstasy Buildcon Pvt. Ltd. vs. DCIT, CC, Ghaziabad: A Tribunal Case Analysis for AY 2017-18
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