Facts of the Case

The Principal Commissioner of Income Tax (Central-1) filed appeals before the Delhi High Court against orders relating to search-based assessment proceedings involving Ojjus Medicare Pvt. Ltd. and numerous connected matters. The case arose from search and seizure operations conducted by the Income Tax Department, pursuant to which proceedings were initiated against several entities and individuals treated as persons connected with the searched party.

The matters included both Revenue appeals and writ petitions filed by assessees challenging notices and proceedings under the Income Tax Act, particularly those initiated by Central Circle authorities following the search. The litigation formed part of a large batch of cases arising from the same investigative exercise.

Issues Involved

  1. Whether proceedings against persons other than the searched entity were validly initiated under the statutory framework governing search assessments.
  2. Whether jurisdiction of Central Circle authorities over such persons was lawful.
  3. Whether reassessment of completed years required incriminating material discovered during search.
  4. Whether the impugned proceedings complied with statutory requirements and procedural safeguards. 

 Petitioner’s Arguments (Revenue)

  • The Revenue contended that the proceedings were initiated pursuant to a lawful search and were within the statutory framework of the Income Tax Act, 1961.
  • It was argued that jurisdiction had been validly assumed by Central Circle authorities.
  • The Revenue maintained that the material gathered during the search justified initiation of proceedings against the concerned assessees.
  • The impugned orders granting relief to the assessees were alleged to be erroneous in law.

 Respondent’s Arguments (Assessees)

  • The assessees contended that proceedings against them were without jurisdiction, particularly where they were not the persons searched.
  • It was argued that no incriminating material relating to specific assessment years had been found during the search.
  • The assessees asserted that completed assessments could not be reopened in the absence of such material.
  • It was further contended that statutory requirements, including recording of proper satisfaction, had not been fulfilled.

Court Order / Findings

  • Jurisdiction over non-searched persons must be exercised strictly in accordance with statutory provisions.
  • Proceedings cannot be sustained merely on the basis of a search conducted on another entity unless material relatable to the concerned assessee is found.
  • Reopening of completed assessments requires incriminating material having a bearing on determination of income for the relevant years.
  • The validity of proceedings must be assessed with reference to compliance with jurisdictional conditions and procedural safeguards.

Important Clarification

  • Search-based proceedings against persons other than the searched entity are not automatic.
  • Jurisdiction arises only when seized material pertains to or belongs to such persons.
  • Completed assessments cannot ordinarily be disturbed without incriminating material relating to those years.
  • The ruling reinforces strict adherence to statutory safeguards in search and post-search assessment proceedings.


Link to download the order –  https://www.mytaxexpert.co.in/uploads/1772275611_THEPR.COMMISSIONEROFINCOMETAXCENTRAL1VsOJJUSMEDICAREPVT.LTD..pdf

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