2023 (5) TMI 373 - SCH - Income Tax

Assessment u/s 153C - As found by the High Court 2018 (5) TMI 2115 - DELHI HIGH COURT in none of the cases any incriminating material was found during the search either from the Assessee or from third party - HELD THAT - As no incriminating material was found in case of any of the Assessees either from the Assessee or from the third party and the assessments were under Section 153-C of the Act the High Court has rightly set aside the Assessment Order(s). Therefore the impugned judgment and order(s) passed by the High Court do not require any interference by this Court. Hence all these appeals deserve to the dismissed and are accordingly dismissed. Prayer made on behalf of the Revenue to permit them to initiate the re-assessment proceedings is concerned it is observed that it will be open for the Revenue to initiate the re-assessment proceedings in accordance with law and if it is permissible under the law.

Summary

Issues Involved:
The judgment involves the assessment under Section 153-C of the Income Tax Act, 1961, the absence of incriminating material during search, the setting aside of assessments by the High Court, and the possibility of initiating re-assessment proceedings under Section 147/148 of the Act.

Assessment under Section 153-C:
The High Court found that no incriminating material was discovered during the search related to the Assessees. Consequently, the assessments under Section 153-C of the Act were rightly set aside by the High Court. The Revenue sought permission to initiate re-assessment proceedings under Section 147/148 based on certain observations in a recent decision. However, since no incriminating material was found in any of the cases, the High Court's decision to set aside the Assessment Orders was upheld by the Supreme Court. The appeals were dismissed as a result.

Initiation of Re-assessment Proceedings:
While the appeals were dismissed, the Supreme Court noted that the Revenue could initiate re-assessment proceedings in accordance with the law if permissible. The judgment emphasized that the Revenue's request to initiate re-assessment proceedings would be considered based on the legal provisions applicable.

Conclusion:
The Supreme Court upheld the High Court's decision to set aside the assessments under Section 153-C due to the absence of incriminating material. The appeals were dismissed, but the possibility of the Revenue initiating re-assessment proceedings under Section 147/148 was acknowledged, subject to legal provisions. The judgment concluded by dismissing all the appeals and allowing the Revenue to pursue re-assessment proceedings if legally permissible.