Facts of the Case

A search and seizure operation under Section 132 was conducted in the Jeevan Jyoti Group on 29.05.2012. Pursuant to the search, assessment proceedings were initiated under Section 153A.

During the course of proceedings, the assessees filed applications before the Income Tax Settlement Commission under Section 245C. The applications were admitted under Section 245D, and reports from the tax authorities were obtained.

Subsequently, the Settlement Commission passed orders under Section 245HA causing abatement of the proceedings, thereby restoring jurisdiction to the Assessing Officer.

Consequently, the Assessing Officer completed assessments under Sections 153A read with 143(3). The validity of these assessments, including approval under Section 153D and limitation aspects, became the subject matter of appellate proceedings.

Search-based assessments following abatement of Settlement Commission proceedings formed the core controversy.

Issues Involved

  1. Whether the assessments framed under Sections 153A read with 143(3) after abatement were valid in law.
  2. Whether approval granted under Section 153D was mechanical or without due application of mind.
  3. Whether the assessments were barred by limitation.
  4. Whether procedural requirements post-search were properly complied with.

Petitioner’s (Assessee’s) Arguments

  • The approval under Section 153D was granted mechanically without proper examination of records.
  • The assessments suffered from procedural defects and were not validly framed.
  • Limitation provisions were allegedly violated.
  • The search assessments were not sustainable in absence of proper incriminating material.

  Respondent’s (Revenue’s) Arguments

  • The Joint Commissioner had granted approval under Section 153D after due consideration of facts and records.
  • Assessments were completed in accordance with law after abatement of Settlement Commission proceedings.
  • Procedural requirements were duly followed.
  • Therefore, the assessments were valid and enforceable. 

 Court Order / Findings (ITAT)

  • Upon abatement of proceedings before the Settlement Commission, jurisdiction validly reverted to the Assessing Officer.
  • Assessments under Sections 153A read with 143(3) could therefore be completed.
  • Approval under Section 153D was found to have been granted after due application of mind based on records.
  • Allegations of mechanical approval were not substantiated.

 Important Clarification by the Tribunal

  • Abatement of Settlement Commission proceedings restores full assessment powers to the Assessing Officer.
  • Approval under Section 153D cannot be presumed mechanical without concrete evidence.
  • Search assessments under Section 153A are a special procedure and must be evaluated in that statutory framework.

Link to download the order – https://itat.gov.in/public/files/upload/1654492405-FINAL%20ITA%20No.%2073%20of%202019%20Jeevan%20Jyoti%20Charitable%20Trust%20All%20orders.pdf

 

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