Date of Order: July 27, 2023
Case Number: ITA 2834/DEL/2022
Assessment Year: 2017-18
This case involves an appeal filed by DC IT Central Circle-2, Noida, challenging the order of CIT(A)-4, Kanpur, which addressed the assessment order passed by the Assistant Commissioner of Income Tax, Central Circle-2, Noida under Section 143(3) of the Income Tax Act, 1961, for the assessment year 2017-18. The respondent in this case is Shiv Shakti Construction, based in Greater Noida, Uttar Pradesh.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘G’, consisting of Judicial Member Shri Challa Nagendra Prasad and Accountant Member Shri Pradip Kumar Kedia, reviewed the case. The appeal arose from an order dated September 27, 2022, passed by CIT(A)-4, Kanpur, which was challenged by the revenue department.
The appellant, represented by Shri H.K. Choudhary, CIT-DR, argued that the assessment order passed under Section 143(3) for the assessment year 2017-18 was valid and should not have been considered null and void. The grounds of appeal included:
The tribunal noted that a search was initiated on November 27, 2020, and the assessment for the assessment year 2017-18 should have been covered under Section 153A of the Act. However, the assessment was framed under Section 143(3) on May 30, 2022, which was deemed invalid. The tribunal upheld the CIT(A)’s decision, which stated:
In view of the above discussion, the AY under appeal i.e. 2017-18 is covered under Section 153A, and proceedings related to this AY should have been abated. However, the AO continued the assessment proceedings under Section 143 of the Act and passed the order under Section 143(3). Simultaneously, he also started the proceedings under Section 153A of the Act for AY 2017-18 and made the same addition as was made under Section 143(3) of the Act. This action of the AO is not sustainable and the order passed under Section 143(3) of the Act is ab initio void in view of the provisions of Section 153A of the Act. Therefore, the addition of Rs. 12,08,41,884 is deleted and this ground of appeal is hereby allowed.
The tribunal found no infirmity in the order of the CIT(A) granting relief to the assessee and dismissed the grounds raised by the revenue.
The ITAT dismissed the appeal of the revenue, confirming that the assessment order passed under Section 143(3) was invalid, and upheld the CIT(A)’s decision to delete the addition of Rs. 12,08,41,884.
This case highlights the importance of adhering to the correct procedural guidelines for assessments following a search. The tribunal’s decision emphasizes that assessments must be conducted under the appropriate sections of the Income Tax Act to ensure validity and compliance with legal requirements.
Order pronounced in the open court on July 27, 2023.
Judicial Member: Shri Challa Nagendra Prasad
Accountant Member: Shri Pradip Kumar Kedia
Assessee Representation: Shri Harish Choudhary CA, Shri Mohit Choudhary CA, Shri Nitin Kanwar Adv, Ms. Neetu Jain CA
Department Representation: Shri H.K. Choudhary, CIT-DR
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