2019 (1) TMI 584 - AT - Income Tax

Assessment u/s 153A / 153C - Revenue claims that audited statement in the form of tally accounts was said to be found during the course of search operation - Held that - It is not in dispute that the very same document was already available before the Assessing Officer along with the return of income. Therefore, at any stretch of imagination, it cannot be said that the audited statement in the form of tally accounts is an incriminating material found during search as claimed by the Revenue. In the absence of any incriminating material, this Tribunal is of the considered opinion that there cannot be any assessment under Section 153A / 153C of the Act as found by the CIT(Appeals). This view of ours is fortified by the judgment of Apex Court in Principal CIT v. Meeta Gutgutia 2018 (7) TMI 569 - SUPREME COURT OF INDIA. - Decided against revenue

Summary

Issues:
Appeals by Revenue against orders of CIT(Appeals) -18, Chennai for assessment year 2011-12 regarding treatment of advances as income without incriminating material found during search operation.

Analysis:
The appeals by the Revenue were against orders of the CIT(Appeals) regarding treatment of advances as income without any incriminating material found during the search operation. The Departmental Representative argued that the assessees received cash advances during the relevant financial year and as no explanation was provided, the Assessing Officer treated the advances as income. However, the CIT(Appeals) deleted the addition stating no incriminating material was found, which the Departmental Representative disputed based on audited tally statements discovered during the search operation. The Representative argued against the applicability of certain judgments to the case.

On the contrary, the representative for the assessees contended that the assessment proceedings were initiated before the search took place, and as no pending assessment was present during the search, the Assessing Officer could not reopen concluded assessments. The representative emphasized that the material claimed to be found during the search was already available to the Assessing Officer, and without new incriminating material, the assessment could not be reopened under Section 153A/153C of the Act.

The Tribunal analyzed the submissions and found that all assessees had filed their income tax returns before the search, with the assessment proceedings concluding before the search date. As no pending assessment was present during the search, the Tribunal held that the Assessing Officer could not reopen concluded assessments. Referring to Sections 153A and 153C of the Act, the Tribunal emphasized that assessments could only be made based on incriminating material found during the search. As the audited statement in question was not new material and was already with the Assessing Officer, it could not be considered incriminating. The Tribunal cited a Supreme Court judgment to support its decision and confirmed the order of the lower authority, dismissing all appeals by the Revenue.

In conclusion, the Tribunal dismissed all appeals by the Revenue, maintaining that in the absence of incriminating material found during the search operation, assessments under Section 153A/153C of the Act could not be conducted.