2016 (6) TMI 1437 - AT - Income Tax

Validity of Assessment u/s 153C - absence of any material seized during search - additions made by the Assessing Officer and confirmed by Ld. Commissioner of Income Tax (Appeal) are whether bad in law as the assessment for the impugned assessment year were not awaited at the time of issuance of notice u/s 153C - HELD THAT - Unless and until any material/document or information is gathered/unearthed at the time of search, we find merit in the contention of the assessee. Our view finds support by the decision from Hon ble jurisdictional High Court in Allcargo Global Logistic Ltd. 2015 (5) TMI 656 - BOMBAY HIGH COURT thus, on this preliminary ground alone, the additions made by the Assessing Officer/confirmed by the Ld. Commissioner of Income Tax (Appeal) stands deleted.

Summary

Issues involved:
1. Challenge to the order passed under section 143(3) read with section 153C of the Income Tax Act, 1961.
2. Validity of additions made in the absence of incriminating material found during search.

Comprehensive Analysis:
Issue 1: The appellant and the Revenue appealed against the order of the Ld. First Appellate Authority. The main contention raised by the appellant was the legality of the order passed under section 143(3) read with section 153C of the Income Tax Act, 1961. The appellant argued that the order was erroneous as there was no material seized during the search. Other grounds were not pursued by the appellant, considering them to be of academic nature.

Issue 2: The core issue revolved around the validity of the additions made by the Assessing Officer without any incriminating material being found during the search. The appellant contended that since the assessments for the relevant years were not pending at the time of issuing notice under section 153C, no additional income could be assessed without any incriminating material. The appellant relied on a Tribunal decision and highlighted that unless specific material or information was unearthed during the search, no further additions could be made. The Tribunal referred to a similar case and upheld the appellant's argument, stating that without any incriminating material, the additions made by the Assessing Officer were invalid. The Tribunal's decision was supported by a ruling from the Hon'ble Bombay High Court. Consequently, the additions made by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeal) were deemed null and void.

In conclusion, the Tribunal found merit in the appellant's argument regarding the absence of incriminating material during the search, leading to the deletion of the additions made by the Assessing Officer. The appeal of the Revenue was dismissed as it had become in-fructuous. The judgment was delivered on 27/06/2016, with the presence of representatives from both sides in the open court.