INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Assessee challenged initiation of section 153A proceedings on the ground of no incriminating material found during search -

AO pursuant to search conducted at assessee's premises, initiated section 153A proceeding by issuing notice. Assessee challenged this on the ground of no incriminating material found during search. Held: Whenever action is taken under section 132 AO is under statutory obligation to issue notice for earlier six years entirely even when there is no incriminating material. Therefore, in case of section 153A legal scenario is that the reopening can be done by AO and warrant is issued even without having any incriminating material. Reassessment of the total income of completed assessments has to be made taking note of undisclosed income, if any, unearthed during search and income that escaped assessments is required to be clubbed together with total income determined in the original assessment and assessed as total income. However, irrespective of the fact whether any incriminating material is found during search, AO is empowered to issue warrant and consequential assessments under section 153A have to be undertaken.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2006-07 to 2009-10

INCOME TAX ACT, 1961

Section 153A

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