2024 (6) TMI 261 - AT - Income Tax

Validity of assessment order u/s 153C - Whether no incriminating documents in respect of transaction appearing in the bank account have been found ? - HELD THAT - As seen from satisfaction note that the incriminating/seized document pertains to F.Y. 2010-11 relevant to A.Y 2011-12. A.Y before us is A.Y 2013-14 and it can be safely concluded that no incriminating material was found pertaining to A.Y 2013-14 basis which the assessment could have been framed. The ratio laid down in the case of Singhad Technical Education Society 2017 (8) TMI 1298 - SUPREME COURT squarely applies wherein the Hon'ble Supreme Court has held that for each A.Y of the block period, there should be separate incriminating material to frame assessment. This has been reaffirmed by the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt Ltd 2023 (4) TMI 1056 - SUPREME COURT . Thus we are of the considered view that the impugned assessment order cannot stand on its own legs and hence quashed. Decided in favour of assessee.

Summary

Issues:
Validity of assessment order based on incriminating material found during search and seizure operation.

Analysis:
The appeal was filed against the order of the ld. CIT(A)-26, New Delhi for A.Y. 2013-14. The grievances of the assessee included challenges to the assessment order, addition made on protective basis, and failure to consider various facts and provisions. The counsel for the assessee argued that the assessment order was void ab initio due to the lack of incriminating material for the relevant year. The satisfaction note and relevant material were examined by the tribunal.

During a search and seizure operation in the Minda Group cases, documents of the assessee were seized. The satisfaction note indicated that the incriminating material found related to a different assessment year, not the one under consideration. Citing legal precedent, including the Supreme Court cases Singhad Technical Education Society and Abhisar Buildwell Pvt Ltd, the tribunal concluded that separate incriminating material is required for each assessment year within a block period.

Based on the satisfaction note and legal principles, the tribunal held that the assessment order was invalid and quashed it. Consequently, the tribunal did not delve into the merits of the case. As a result, the appeal of the assessee was allowed, and the assessment order was declared void.