THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. ROLLAND ENTERPRISES LTD.

PDF · subscribers
ITA/558/2024HC DelhiDLHC01080814202402 December 2024Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that the issue of whether an assessment for AY 2007-08 could be reopened under Section 153C based on a satisfaction note dated November 18, 2013, was no longer res integra. The Court referred to its own decisions in Commissioner of Income Tax-7 v. RRJ Securities Ltd. (2016) and Commissioner of Income Tax v. Jasjit Singh (2023), which established that the date of the satisfaction note should be construed as the date of the search for calculating the six-year block period under Section 153C. Consequently, the High Court found no infirmity in the ITAT's decision to allow the Assessee's cross objections and dismiss the Revenue's appeal. The Court concluded that no substantial questions of law arose.

What were the facts?

The Revenue has filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated December 29, 2023, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had allowed the Assessee's cross objections, holding that assessments for Assessment Year (AY) 2007-08 were invalid. A search was conducted on March 22, 2012, on M/s Focus Energy Group, and material pertaining to the Assessee was found. The Assessing Officer (AO) of the searched person issued a satisfaction note on November 18, 2013, to invoke Section 153C. Assessments were framed under Section 153C/144 for AY 2007-08. The Assessee appealed to the CIT(A), which was allowed. The Revenue appealed to the ITAT, and the Assessee filed cross objections, arguing the assessments were time-barred under Section 153C.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT erred in law in holding that the assessments made for AY 2007-08 were outside the scope of Section 153C of the Act and treated them as void ab initio, even when the AO of the searched person and the Assessee were the same, and the proviso to Section 153C was confirmed in its application to abatement but did not cater to the date from which the six-year period was to be reckoned? 2. Whether on the facts and in the circumstances of the case, the ITAT erred by relying on case laws with different factual matrices? 3. Whether on the facts and in the circumstances of the case, the ITAT erred by not appreciating that the AO of the searched person and the AO of the Assessee were the same, especially when the AO was satisfied that seized documents belonged to the Assessee and recorded a satisfaction note dated November 18, 2013? Assessee's contentions: The assessments framed under Section 153C for AY 2007-08 were beyond the six-year period stipulated under Section 153C. Revenue's contentions: The ITAT erred in holding the assessments invalid, particularly given the same AO for both parties and the satisfaction note date. The ITAT relied on inapplicable case laws.

Which sections of the Income-tax Act were involved?

Section 153C,Section 260A,Section 144

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 558/2024 & CM No.67007/2024 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 .....Appellant Through: Mr. Ruchir Bhatia, Mr. Anant Mann & Mr. Abhishek Anand, Advs. Versus ROLLAND ENTERPRISES LTD. .....Respondent Through: Ms. Kavita Jha, Sr. Adv. with Mr. Vaibhav Kulkarni & Mr. Himanshu Aggarwal, Advs. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R % 02.12.2024

1.

The Revenue has filed the present appeal under Section 260A of the Income Tax Act, 1961 (hereafter the Act) impugning a common order dated 29.12.2023 (hereafter the impugned order) passed by the learned Income Tax Appellate Tribunal (hereafter the ITAT) in ITA Nos.3348/Del/2015 & 3353/Del/2015 and cross objections being CO. Nos.352/Del/2015 & 357/Del/2015. The present appeal is confined to the impugned order insofar as it relates to ITA Nos.3348/Del/2015 and CO. No.352/Del/2015, which relate to assessment year (AY) 2007-08. 2. The learned ITAT allowed the Assessee’s cross objections and held that the assessments framed for AY 2007-08 was invalid.

3.

The Revenue has projected the following questions of law for consideration of this court: “2.1 Whether on the facts and in the circumstances of the case, the Ld. ITAT has erred in law in holding that This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 11:55:57

assessment made for the year under consideration are outside the scope of section 153C of the Act and treated the assessment as voids ab initio, even when assessing officer of searched person and that of the other person is the same and proviso to section 153C is confirmed in its application to the question of abatement and does not cater with regard to date from which six years period was to be reckoned?

2.

2 Whether on the facts and in the circumstances of the case, Ld. ITAT has erred by relying on the case laws wherein the facts of the case are different from this case?

2.

3 Whether on the facts and in the circumstances of the case, the Ld. ITAT has erred by not appreciating the fact that the AO of the searched person and the AO of the Assessee are same especially when the AO was satisfied that the documents seized from the person in respect to whom the search was conducted belong to the other person and consequently recorded the satisfaction note date 18.11.2013?”

4.

The relevant context in which the aforesaid questions of law arise are briefly narrated as under:

4.

1 A search was conducted on 22.03.2012 on M/s Focus Energy Group of companies. During the search proceedings, certain material was found, which contained information pertaining to the Assessee. Thus, the Assessing Officer (AO) of the searched person prepared a satisfaction note dated 18.11.2013 for the purposes of invoking Section 153C of the Act.

4.

2 The AO framed the assessment under Section 153C/144 of the Act in respect of AY 2007-08. The Assessee appealed the assessment order before the Commissioner of Income Tax (Appeals) [hereafter the CIT(A)], which was allowed.

4.

3 Aggrieved by the same, the Revenue preferred an appeal before the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 11:55:57

Income Tax Appellate Tribunal (hereafter the ITAT). The Assessee also filed cross objections in the said appeal, inter alia, claiming that the assessments framed under Section 153C of the Act in respect of the AY 2007-08 were beyond the period of six years as stipulated under Section 153C of the Act.

5.

The learned ITAT allowed the cross objections and consequently dismissed the appeal preferred by the Revenue.

6.

The question whether the assessment in respect of the AY 2007-08 could be reopened under Section 153C of the Act on the basis of a satisfaction note dated 18.11.2013 is no longer res integra. The date of the satisfaction note is required to be construed as the date of the search for imputing the provisions for calculating the block period of six years as held by this court in Commissioner of Income Tax-7 v. RRJ Securities Ltd.: (2016) 380 ITR 612 and in Commissioner of Income Tax v. Jasjit Singh: (2023) 458 ITR 437. 7. In view of the above, we find no infirmity with the decision of the learned ITAT in allowing the cross objections preferred by the Assessee and dismissing the appeal filed by the Revenue.

8.

No substantial questions of law arise in the present appeal. The same is dismissed. VIBHU BAKHRU, J SWARANA KANTA SHARMA, J DECEMBER 02, 2024 ‘gsr’ Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/12/2024 at 11:55:57

More judgments on Section 153C

All 9,619 judgments and leading authorities on Section 153C →

Recent GST High Court judgments

Search GST case law →