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Facts
The assessee filed a return of income which was taken up for scrutiny. A search action was conducted during the pendency of the scrutiny proceedings. The Assessing Officer framed an assessment order after the search.
Held
The Tribunal held that once a search action is initiated, all other assessment or re-assessment proceedings ought to be treated as abated in light of Section 153A(1) of the Income Tax Act, 1961.
Key Issues
Whether the assessment framed under Section 143(3) is valid when a search action was initiated during the pendency of scrutiny proceedings. Applicability of Section 153A in abating other proceedings post-search.
Sections Cited
143(3), 143(2), 153A, 153A(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal SA No. 550/Del/2025 for Assessment Year 2017-18, arise against the CIT(A)-3, Gurgaon’s in case No. 10345/CIT(A)-3/GGN/2019-20 dated 19.09.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused. proceedings. A perusal of the case file indicates that there arises the first and foremost issue of validity of the impugned section 143(3) assessment itself dated 26.12.2019 framed by the learned DCIT, Central Circle, Karnal for the following reasons.
There is hardly any dispute between the parties that this assessee/appellant is a company carrying out manufacturing and selling cosmetics and bullion trading etc. It had filed it’s return of income of Rs.28,85,32,830/- on 14.10.2017. The same was taken up for scrutiny and section 143(2) notice dated 10.08.2018 stood served to the assessee. There is further no quarrel between the parties that the learned departmental authorities had thereafter executed section 143(2) search action dated 22.03.2019 i.e. during the pendency of scrutiny in it’s case which followed the impugned assessment framed by the Assessing Officer on 26.12.2019. Leaned counsel has further invited the tribunal’s attention to page 6 in the assessee’s paper book that section 153A notice stood issued to the company on 03.12.2020.
The Revenue is indeed very fair in not disputing all these intervening developments. We accordingly are of the considered view that once the search action dated 22.03.2019 had taken place in the assessee’s case, all other proceedings including any assessment or re-assessment, as the case may be, ought to have treated as “abated” in light of section 153A(1) 1st proviso which is in the nature of a non-obstante clause. We further deem it appropriate to observe here for the sake of completeness that section 153A(1) 2nd proviso treats all the assessment or re-assessment proceedings relevant to any assessment year following period of six years; abated as on the date of “initiation of the search” than that of consequential notice to be issued thereunder. We thus find force in the assessee’s instant first and foremost legal ground/argument challenging validity of the impugned assessment framed by the learned Assessing Officer dated 20.12.2019 which stands quashed in very terms.
All other pleadings between the parties stand rendered academic.
This assessee’s appeal in