High Court Upholds ITAT Decision, States ‘No Assessment Proceedings Pending, No Basis for Section 153A Initiation'”
In a landmark decision, the High Court of Patna has affirmed the Income Tax Appellate Tribunal (ITAT)’s ruling on the assessment under Section 153A of the Income Tax Act, 1961. The case revolved around whether the Assessing Officer could initiate proceedings under Section 153A when there were no pending assessments at the time of the initiation.
The Court re-framed the key issue in the case as: “Whether the ITAT was justified in finding the assessment under Section 153A bad, on the consideration that no assessment proceedings were pending as on the date of initiation of proceedings under Section 153A?” The Honorable Chief Justice K. Vinod Chandran, along with Mr. Justice Partha Sarthy, presided over the case.
The appellant, the Assistant Commissioner of Income Tax, Central Circle 1, Patna, challenged the ITAT’s findings, which had ruled in favor of the respondent, Satish Kumar Keshri of M/s Hira Panna Jewellers.
Citing the Tribunal’s reliance on a previous High Court of Delhi judgment, the Court summarized, “The Tribunal was perfectly within the statutory framework, in making a remand directing the Assessing Officer to carry out re-assessment of the assessment year 2002-03, which stood completed as on the date of initiation of Section 153A proceedings, if some incriminating material seized during the search is available.”
In its conclusive remarks, the High Court stated, “We bow to the proposition as declared by the High Court of Delhi and affirmed by the Hon’ble Supreme Court of India and answer the question framed in favour of the assessee and against the Revenue.”
With this ruling, the High Court has set a precedent that could have far-reaching implications for tax assessments, particularly in cases where there are no pending assessments at the time of initiation under Section 153A. The appeal filed by the Revenue was consequently rejected, solidifying the ITAT’s original decision.
Date of Decision: 21-07-2023
Assistant Commissioner of Income Tax vs Satish Kumar
