2019 (7) TMI 309 - HC - Income Tax

Assessment u/s 153A - no incriminating material had been found against the Assessee during the course of the search - HELD THAT - CIT (Appeals) agreed with the Assessee on merits and quashed the assessment under Section 153-A of the IT Act. When the matter reached the ITAT at the instance of the Revenue, it dismissed the appeal following the decision of this Court in Commissioner of Income-tax (Central)-III v Kabul Chawla 2015 (9) TMI 80 - DELHI HIGH COURT The Court is informed by learned counsel for the Revenue that although the Revenue s appeal in the case of Commissioner of Income-tax (Central)- III v Kabul Chawla (supra) was dismissed by the Supreme Court on the ground of monetary limit of the tax effect involved, the correctness of the said judgment is in question in other appeals filed by the Revenue in the Supreme Court. Nevertheless, the Court is informed that there has been no stay of the operation of the judgment of this Court in Commissioner of Income-tax (Central)-III v Kabul Chawla (supra). No substantial question of law

Summary

Issues Involved:
Challenge to assessment under Section 153-A of the Income Tax Act, 1961 based on lack of incriminating material found during search and seizure operation.

Analysis:
The appeal was filed against the order passed by the Income Tax Appellate Tribunal (ITAT) in relation to the assessment under Section 153-A of the Income Tax Act for the Assessment Year 2010-11. The challenge was based on the fact that no incriminating material was found against the Assessee during the search conducted on M/s Jaipuria Group. The Commissioner of Income Tax (Appeals) agreed with the Assessee and quashed the assessment under Section 153-A. However, the ITAT dismissed the appeal following a decision of the High Court in a similar case.

The Court was informed that the Supreme Court dismissed the Revenue's appeal in a related case due to the monetary limit of the tax effect involved. Despite this, the correctness of the judgment in question is being challenged in other appeals filed by the Revenue in the Supreme Court. However, there has been no stay on the operation of the judgment of the High Court in the case being referred to.

Given that the ITAT decision was based on the High Court's judgment that has not been stayed by the Supreme Court and is still valid, the Court found no reason to interfere with the ITAT's order. It was concluded that no substantial question of law arose in the present appeal, and therefore, the appeal was dismissed accordingly.