PRINCIPAL COMMISSIONER OF INCOME-TAX (CENTRAL)- 1 vs. M/S BIHARIJI ISPAT UDYOG LIMITED,

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ITA/470/2017HC DelhiDLHC01254226201717 August 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MS. JUSTICE PRATHIBA M. SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there was no legal infirmity in the impugned order of the ITAT. The Court noted that the Assessing Officer (AO), in the remand report, had confirmed that the additions made were not based on any material seized during the search. Therefore, the ITAT's reliance on the decision in Commissioner of Income-Tax v. Kabul Chawla [2016] 380 ITR 573 (Del) was justified. The Court found that no substantial question of law arose from the ITAT's order. Consequently, the appeals filed by the Revenue were dismissed. The operative direction was the dismissal of the Revenue's appeals.

What were the facts?

The appeals were filed by the Principal Commissioner of Income-Tax (Central)-1 against the order dated 30th December, 2016, passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 418/Del/2014 and cross objections. The assessment year in question is 2007-08. The core of the dispute revolves around the ITAT's decision to quash the assessment order passed under Section 153A of the Income Tax Act, 1961. The Revenue contended that the ITAT erred in limiting the scope of additions under Section 153A to only those based on incriminating documents seized during a search. The Revenue acknowledged that an appeal against the precedent relied upon by the ITAT was pending before the Supreme Court without a stay.

What were the issues?

1. Whether the ITAT was correct in law in quashing the assessment order under Section 153A of the Income Tax Act, 1961, by holding that the scope of additions under this section is limited to incriminating documents seized during a search, following the decision in Commissioner of Income-Tax v. Kabul Chawla [2016] 380 ITR 573 (Del)? Assessee's Contention: The ITAT's decision was correct in limiting additions under Section 153A to documents seized during a search, as per the Kabul Chawla precedent. Revenue's Contention: The ITAT erred in quashing the assessment order by limiting the scope of additions under Section 153A. The Revenue pointed out that an appeal against the Kabul Chawla decision was pending before the Supreme Court, although no stay had been granted.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

f $-3 & 4 * IN THE HIGH COURT OF DELHI AT NEW DELHI 3 ITA No. 470/2017 + PRINCIPAL COMMISSIONER OF INCOME-TAX (CENTRAL)-1 Appellant Through ; Mr. Zoheb Hossain, Senior Standing Counsel for Revenue. versus M/S BIHARIJIISPAT UDYOG LIMITED, Respondent Through : Mr. Ved Jain and Mr.Pranjal Srivastava, Advocates. WITH 4 . ITA No. 472/2017 . + PIUNCIPAL COMMISSIONER OF INCOME-TAX (CENTRAL)-1 Appellant Through: Mr. ZohebHossain, SeniorStanding Counsel for Revenue. versus M/S BIHARIJI ISPAT UDYOG LIMITED Respondent Through : Mr. Ved Jain and Mr.Pranjal Srivastava, Advocates. CORAM: JUSTICE S. MURALIDHAR JUSTICE PRATHIBA M. SINGH ORDER % 17.08.2017 1. These appeals by the Revenue are directed against the order dated 30^^^ December, 2016 passed bytheIncome Tax Appellate Tribunal ('ITAT') ITA 470/2017 & 472/2017 Page I of2 Digitally Signed By:AMULYA Signature Not Verified

•r inITA No. 418/Del/2014 and the cross objections inC.O. No. 220/Del/2014 Assessment Year ('AY') 2007-08. 2. The question urged in these appeals is whether the ITAT was correct in law in quashing the assessment order under Section 153Aof the Act by holding that scope of additions under this section is limited to incriminating documents seized during search following the decision in Commissioner of Income-Tax v. KabulChawla [2016] 380ITR 573 (Del). 3. Learned counsel for the Revenue points out that the Revenue has filed an appeal in the Supreme Court against the above decision but no stay thereof has been granted. 4. The Court does not find any legal infirmity in the impugned order ofthe ITAT particularly since it notes that the AO, in the remand report, confirmed that "the issue on which addition has been made is not based on any material seized in the search". 5. No substantial question of law arises fi-om the impugned order of the ITAT. These appeals areaccordingly dismissed. S. MURALIDHAR, J. PRATHIBA M. SINGH, J. AUGUST 17, 2017/j ITA 470/2017 & 472/2017 Page 2 of2

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