Pr. Commissioner of Income Tax (Central)-2 v. M/s. S.G. Portfolio Pvt. Ltd.

1. FACTS OF THE CASE

For AY 2009-10, the assessee returned Rs.5,073 on 26 October 2009. Following the Aseem Kumar Gupta group search/survey, the 26 December 2011 section 143(3)/153C assessment fixed income at Rs.7,35,60,220 with protective additions. CIT(A) quashed it on 1 February 2013 for lack of incriminating material. A section 148 notice followed on 16 May 2013. Despite a 6 September 2013 letter adopting the original return, the AO proceeded as if none existed and assessed Rs.10,98,39,924 on 2 March 2015 under sections 147/144.

Source: Paragraphs 1–12,20(iv); PDF pp.1–3,5

2. DISCUSSION BY THE COURT

CIT(A) again annulled the assessment and ITAT affirmed on 22 March 2021. Revenue accepted that no fresh material existed but argued sections 153C and 147/148 differed. The Court recorded repeated additions, absence of fresh material and mechanical sanction. It particularly held that the return response was on record: the AO had to issue section 143(2) notice rather than proceed under section 144 on a mistaken no-return premise.

Source: Paragraphs 13–26.1; PDF pp.3–6

3. JUDICIAL DECISION

The Tribunal’s order required no interference. No substantial question of law arose and Revenue’s appeal was dismissed.

Source: Paragraphs 27–29; PDF p.6

4. OUTCOME

The second assessment remained quashed. The High Court did not adjudicate the substantive genuineness of each deposit or share-capital item, order a fresh assessment, or create a blanket bar on every reassessment following an unsuccessful section 153C proceeding.

Source: Paragraphs 20–29; PDF pp.5–6

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

The return-adoption letter defeats the no-return premise

The Court identified the 6 September 2013 letter as material showing adoption of the original return in response to section 148. That concrete record made omission of section 143(2) material and recourse to section 144 on the stated premise untenable. In a comparable case, the letter, its filing evidence and assessment record matter more than a general assertion that a return existed.

Source: PDF p.5 · PDF p.6

Switching provisions did not answer the defects in this record

Revenue relied on differences between search assessment and reassessment, while conceding no fresh material. The Court also identified mechanical sanction and substantially repeated additions. Its reasoning examines this combination of defects; it does not say that annulment under section 153C alone extinguishes every possible later reassessment route.

Source: PDF p.4 · PDF p.5

The procedural discussion is not a fresh assessment direction

Paragraph 26 explains that notice should have preceded further action and says an assessment under sections 147/144 might thereafter have been possible. The actual disposition is dismissal of Revenue’s appeal, not remand or permission to start again. Preserve that distinction and avoid treating jurisdictional annulment as a finding that every underlying credit was substantively explained.

Source: PDF p.6