Facts of the Case

A search and seizure operation under Section 132 of the Income-tax Act, 1961 was conducted on 29.05.2012 in the Jeevan Jyoti Group of cases, including the assessee trust. Pursuant to the search, proceedings under Section 153A were initiated.

During the course of assessment proceedings, the assessees filed applications before the Income-tax Settlement Commission under Section 245C. The applications were admitted under Section 245D, and reports were called from the Department.

Subsequently, the Settlement Commission passed orders under Section 245HA resulting in abatement of the proceedings and restoration of jurisdiction to the Assessing Officer. Thereafter, the Assessing Officer completed assessments under Section 153A read with Section 143(3), which were challenged in appellate proceedings.

Issues Involved

  1. Whether assessments framed under Section 153A after abatement of Settlement Commission proceedings are valid.
  2. Whether approval granted under Section 153D was mechanical or without application of mind.
  3. Whether such assessments were barred by limitation.
  4. Scope of jurisdiction of the Assessing Officer after abatement under Section 245HA.

Petitioner’s Arguments (Assessee)

  • The approval under Section 153D was allegedly granted mechanically without proper examination of records.
  • The assessments suffered from procedural defects and were invalid.
  • Limitation provisions were violated.
  • In absence of proper incriminating material, search assessments could not be sustained.

Respondent’s Arguments (Revenue)

  • Upon abatement of proceedings before the Settlement Commission, jurisdiction validly reverted to the Assessing Officer.
  • Approval under Section 153D was granted after due application of mind.
  • Assessments were completed in accordance with statutory provisions.
  • All procedural requirements were complied with.

Court Order / Findings (ITAT Allahabad)

  • Proceedings before the Settlement Commission had abated under Section 245HA.
  • Consequently, jurisdiction to assess reverted to the Assessing Officer.
  • Assessments under Section 153A read with Section 143(3) were therefore permissible.
  • The allegation that approval under Section 153D was mechanical was not substantiated.

Important Clarification

  • Abatement of Settlement Commission proceedings restores jurisdiction to the Assessing Officer.
  • Assessments under Section 153A can be validly completed thereafter.
  • Approval under Section 153D is presumed valid unless shown to be mechanical.
  • Limitation and procedural objections must be supported by evidence.
  • Search assessments remain enforceable despite earlier settlement proceedings.

Link to download the order –

https://itat.gov.in/public/files/upload/1631875599-New%20ita%20No.%2074%20to%2085%20Alld%202019%20Jeevan%20Jyoti%20Charitable%20Trust.pdf

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