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| The Tax Publishers2020 TaxPub(DT) 2370 (Del-Trib) INCOME TAX ACT, 1961
Section 153A
Where disallowances made during course of assessment proceedings being based on third party documents and there being no case of any incriminating document found from the premises of assessee, the disallowances could not have been made in the proceedings under section 153A and hence, the same would not be sustainable.
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Search and seizure - Assessment under section 153A - Disallowances based on third party documents - No incriminating document found from premises of assessee
A search and seizure operation under section 132 was carried out in 'D' group of cases. During year under consideration, assessee-company was issued statutory notice under section 153A and in response to the same, it filed return of income. Assessment was completed under section 153A after making certain disallowances. It was contended on behalf of the assessee that the whole basis of disallowances being based on third party documents and there being no case of any incriminating document found from the premises of the assessee, the impugned disallowances could not have been made in proceedings under section 153A. Held: It was evident that addition in dispute was made in the assessment completed under section 153A. The Act provided separate provisions for making assessments in case of material found in the course of the search from the premises of the assessee as well as the material found in the course of search at the premises of the third party. In instant case, when the case of the assessee was covered under the provision of section 153 and reliance was placed on the incriminating material found during the course of search of third-party, then provisions of section 153C would be applicable. Further, during course of assessment under section 153A, the incriminating material, if any, found during the course of search of the assessee only could be utilized and not the material found in the search of any other person. Therefore, the assessment framed by the AO under section 153A was in violation of the procedure provided in the Act and hence, the same was void ab initio and could not be sustained.
REFERRED : Pr. CIT v. Meeta Gutgutia Prop. M/s. Ferns 'N' Petals (2017) 395 ITR 526 (Del) : 2017 TaxPub(DT) 1767 (Del-HC) Dy. CIT v. Smt. Shivali Mahajan [ITA No. 5585/Del/2015] : 2019 TaxPub(DT) 2338 (Del-Trib) Pr. CIT v. Meeta Gutgutia (2018) 257 Taxman 441 (SC) : 2018 TaxPub(DT) 4130 (SC)
FAVOUR : In assessee's favour
A.Y. :
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