Once a search action U/s 132 forms the foundation of a case, the Revenue must proceed under Section 153A/153C, rather than invoking reassessment under Section 147/148
The Bombay High Court has delivered a crucial judgment in Sejal Jewellery & Anr. vs. Union of India & Ors., ruling in favor of the petitioners by quashing reassessment proceedings initiated under Section 147 of the Income Tax Act.
The court held that once a search action under Section 132 forms the foundation of a case, the Revenue must proceed under Section 153A/153C, rather than invoking reassessment under Section 147/148. This reinforces the principle that special provisions for search assessments override general reassessment provisions, preventing arbitrary reopening of assessments.
This judgment not only upholds due process but also strengthens taxpayer rights against unwarranted reassessment actions. It’s a landmark decision with far-reaching implications for tax litigation and compliance.
The copy of the order is as under:
