In ITA 923/DEL/2021, Nimbus Multicommodity Brokers Pvt. Ltd., a New Delhi-based company, contested the legal grounds of the assessments made by the DCIT, Central Circle-2, Noida for the assessment year 2012-13. This case was part of a series of appeals involving related entities and similar issues concerning unsecured loans and share premiums.
The appellant challenged the notices issued under section 153A of the Income Tax Act, which were based on a search and seizure operation conducted. The primary contention was the validity of these notices and the consequent assessments, arguing that the necessary jurisdictional conditions for issuing such notices were not met, rendering the assessments void ab initio.
The Tribunal analyzed the issues collectively for related cases due to the similarity in the legal and factual matrix. The central legal question was whether the assessments under section 153A were valid when no incriminating material was discovered during the search that could justify the additions made to the income initially declared by the assessee.
The Tribunal noted the absence of incriminating material directly linking the assessed incomes to any undisclosed income or asset discovered during the search. As a result, it held that the reassessments based on such defective notices were unsustainable in law, leading to the relief sought by the appellant. This decision was consistent with several precedents that restrict the scope of section 153A to cases where incriminating evidence is found.
This case highlights the procedural intricacies and legal thresholds necessary for sustaining assessments under section 153A post-search operations. It serves as a significant reference for similar cases, providing clarity on the limitations of tax authorities in conducting reassessments without concrete evidence.
Nimbus Multicommodity Brokers Pvt. Ltd. vs. DCIT: Legal Appeal in ITA 923/DEL/2021
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