ITA No. 1120/DEL/2022: M3M India Holdings vs. ACIT, Central Circle-2, Faridabad
Date of Pronouncement: September 23, 2022.
Assessment Year: 2012-13.
Introduction
This case involves an appeal filed by M3M India Holdings against the order of the ld. CIT(A) – 3, Gurgaon dated March 31, 2022, for the Assessment Year 2012-13. The appellant challenges the validity of the notice issued under Section 153A and the assessment order passed under section 153A(1)(b) in the absence of any search on the appellant, amongst other grounds.
Background
The appeal encompasses several legal grounds questioning the jurisdiction of the notice and order passed under section 153A, the absence of incriminating material for additions made, and the levy of interest under sections 234A and 234B of the Act, asserting them to be unjustified.
Significant aspects include the challenge against the conducted search operation, undertaken on premises not owned or associated with the appellant, questioning the foundational basis of the jurisdiction for the issuance of the 153A notice and the subsequent assessment orders.
Judicial Findings and Decision
The tribunal analyzed the grounds of appeal meticulously, focusing on the substantial questions of law involved, including the validity of the search operation, the jurisdictional aspects concerning the issuance of notice under section 153A, and the authority to make additions based on evidence not pertaining directly to the assessee.
Specific reference was made to precedents and judicial findings that align with the appellant’s argument that for a search operation to vest authorities with jurisdiction under Section 153A, it must be conducted on premises directly relevant to the assessee.
Additionally, the ruling highlighted that the additions made to the appellant’s income, purportedly based on incriminating material found during the search, were unjustified due to the lack of direct connection with the material and the appellant. It pointed out the mechanical and invalid nature of approval obtained under section 153D of the Act, further invalidating the assessment order.
Conclusion and Order
After considering the submissions from both sides and the evidence presented, the tribunal allowed the appeal, quashing the notice issued under section 153A and the orders passed thereunder. It directed the deletion of the additions made to the appellant’s income, along with the interest levied under sections 234A and 234B of the Act, thereby granting relief to M3M India Holdings.
The tribunal’s decision underscores the critical importance of adhering to procedural and jurisdictional benchmarks in conducting search operations and making assessment orders, reaffirming the principles of natural justice and the rule of law.
