2022 (12) TMI 1357 - AT - Income Tax

Assessment u/s 153A - Incriminating materials found during the search - HELD THAT - In the entire proceeding, the revenue authority was unable to prove that the search was conducted against the assessee. In Panchnama, there is no assessee s name. The revenue was unable to bring any such incriminating materials on basis of the addition was made U/s 153A. AO had wrongly applied the jurisdiction for assessment u/s 153A of the Act. Also, there is no reference of incriminating documents in the assessment order. The order passed by the ld. AO is itself nullity . The addition which was made by the ld. AO is quashed.

Summary

Issues:
1. Exemption under section 10(23)(c)(iiiad) for educational society.
2. Condonation of delay in filing appeal.
3. Jurisdiction of revenue authorities for assessment under section 153A.
4. Addition of corpus donation and unsecured loan in assessment.
5. Applicability of penalty under section 271(1)(c).

Analysis:

1. The appeals were filed against the order of the ld. Commissioner of Income Tax (Appeals) for A.Ys. 2007-08 to 2009-10, claiming exemption under section 10(23)(c)(iiiad) for an educational society with gross receipts below 1 crore. The assessee contended that no search was conducted against them, and the revenue added corpus donation and unsecured loan to their income. The ld. CIT(A) upheld the order, but the Tribunal found that the revenue failed to prove the search against the assessee, leading to the quashing of the addition and allowing the appeals.

2. The Tribunal condoned a 1-day delay in filing the appeal, considering it negligible and with no objection from the ld. CIT-DR.

3. The dispute revolved around the revenue's assessment under section 153A without proving a search against the assessee. The Tribunal found no incriminating documents or mention of the assessee in the Panchnama, leading to a lack of jurisdiction for the assessment under section 153A. The addition made by the ld. AO was quashed.

4. The addition of corpus donation and unsecured loan in the assessment was challenged by the assessee, arguing that they were not part of incriminating documents. The Tribunal found the assessment null and void due to the lack of jurisdiction under section 153A.

5. The Tribunal deemed the penalty order under section 271(1)(c) as inconsequential at this stage, making it infructuous. Consequently, the appeals were allowed, and the penalty was not applicable.

This comprehensive analysis highlights the key issues addressed in the judgment, focusing on the exemption claim, delay condonation, jurisdiction for assessment, addition in assessment, and penalty applicability under the Income Tax Act.