ACIT, Vs. CREAMY FOODS LTD.

Parties Involved

Facts Summary

The case involves three appeals by the Revenue against the orders of the Commissioner of Income Tax (Appeals) quashing the reopening of assessments under Section 148 of the Income Tax Act, 1961, on the ground that it was time-barred by limitation. The appeals pertain to the assessment years 2014-15, 2015-16, and 2016-17. The common issue is whether the Commissioner of Income Tax (Appeals) was correct in quashing the reassessment proceedings initiated by the Assessing Officer based on Explanation 2 to Section 148. The Revenue argued that the escaped income was represented in the form of assets, while the assessee contended that the income had not escaped in the form of assets.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in holding that the reassessment proceedings u/s. 147 of the Act were invalid despite the fact that the AO had validly initiated action based on Explanation 2 to Section 148 post search operation.
• 2. Whether the Ld. CIT(A) erred in holding that the escapement income was not represented in the form of an 'asset' as contemplated u/s. 149(1)(b) and the fourth proviso to Sec. 153A.
• 3. Whether the Ld. CIT(A) wrongly misplaced the reliance on the Hon’ble Supreme Court’s judgement in the case of Union of India vs. Rajeev Bansal [2024].
• 4. Whether the Ld. CIT(A) failed in appreciating that the amended provisions of the Act introduced by the Finance Act, 2021 expressly permit reopening up to ten years where income represented in the form of assets has escaped assessment.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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