Case Number: ITA 955/DEL/2021
Appellant: DCIT, Circle-05, New Delhi
Respondent: Ojjus Medicare Private Limited, New Delhi
Assessment Year: 2012-13
Result: 2012-13
Case Filed on: 2021-08-10
Order Type: Final Tribunal Order
Date of Order: 2022-07-29
Pronounced on: 2022-07-29
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH : E : NEW DELHI
Before: Shri C.M. Garg, Judicial Member and Shri Anadee Nath Misshra, Accountant Member
Introduction
This appeal was filed by the DCIT, Circle-05, New Delhi, challenging the order of the Commissioner of Income Tax (Appeals)-24, New Delhi, dated 04.03.2021, pertaining to the assessment year 2012-13. The case involves the validity of assessment proceedings initiated under Section 153C of the Income Tax Act, 1961.
Background
Ojjus Medicare Private Limited, a healthcare company based in New Delhi, was subjected to assessment proceedings initiated under Section 153C of the Income Tax Act. The assessment was made for the AY 2012-13 based on the satisfaction recorded by the Assessing Officer (AO) of the searched person, which led to the initiation of proceedings against the assessee.
Key Issues and Arguments
The primary grounds of appeal raised by the assessee were:
The assessee contended that the initiation of proceedings and the assessment order passed under Section 153C read with Section 143(3) were invalid due to the improper recording of satisfaction and the incorrect assessment period.
Tribunal’s Analysis and Findings
The tribunal analyzed the case based on the following points:
1. Validity of Proceedings Under Section 153C:
The assessee argued that the assessment proceedings initiated under Section 153C were invalid as they were based on satisfaction recorded after the amendment made to the Income Tax Act by the Finance Act, 2017, which should apply prospectively from AY 2017-18. The tribunal noted that the search was conducted on 07.04.2016, and the satisfaction was recorded on 29.03.2019, with the notice issued on 15.05.2019. As per the prevailing legal interpretation, the amended provisions apply prospectively, and hence the assessment year under dispute (2012-13) does not fall within the block of six assessment years immediately preceding the year of search.
2. Applicability of Legal Precedents:
The tribunal referred to several judicial precedents, including decisions of the Hon’ble Delhi High Court in the cases of PCIT vs. Sarwar Agency P. Ltd. and CIT vs. RRJ Securities Ltd., which clarified that the amendment to Sections 153A and 153C applies prospectively from 01.04.2017. The tribunal also relied on the ITAT Delhi’s decision in the case of Karina Airlines International Ltd. vs. ACIT, where a similar issue was adjudicated, reinforcing that the assessment for AY 2012-13 was beyond the applicable period for the assessment under Section 153C.
Conclusion
The tribunal concluded that the assessment proceedings initiated under Section 153C for AY 2012-13 were invalid as they were based on an improper application of the amended provisions. The assessment order dated 31.12.2019 was quashed along with all consequent proceedings and orders, including the order of the CIT(A).
Final Judgment
Order pronounced in the open court on 29.07.2022.
Signed:
Shri Anadee Nath Misshra, Accountant Member
Shri C.M. Garg, Judicial Member
Dated: 29.07.2022
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Relevant Legal Provisions and Precedents
The case centered around Sections 153A and 153C of the Income Tax Act, 1961, dealing with the assessment of income in cases involving search and seizure operations and the applicability of amendments made by the Finance Act, 2017.
Impact of the Judgment
This judgment underscores the importance of proper procedural adherence in the initiation and execution of assessment proceedings under Sections 153A and 153C. It also highlights the tribunal’s role in ensuring that assessments are based on accurate and just application of the law, particularly when amendments to legal provisions are involved.
Key Takeaways
The case illustrates the necessity of clear evidence, proper recording of satisfaction, and adherence to procedural timelines for assessment proceedings under Section 153C. It emphasizes the tribunal’s role in rectifying procedural errors and ensuring fair assessments based on judicial precedents and legislative amendments.
DCIT vs Ojjus Medicare Private Limited: Dispute Over Assessment Proceedings for AY 2012-13
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