2020 (10) TMI 94 - HC - Income Tax

Validity of assessment u/s. 153A - absence of any incriminating material related to the given assessment year found during search - Whether assessment u/s.153A cannot be made for that assessment year for which assessment has been concluded on the date of search and not abated? - HELD THAT - Tribunal is right in holding that once it is held that the assessment has attained finality, then, the Assessing Officer, while passing independent assessment order under Section 153A read with Section 143(3) of the Act cannot disturb the assessment/reassessment, which has attained finality unless the materials gathered in the course of the proceedings u/s 153A of the Act establish that the relief's granted in the final assessment/reassessment were contrary to the facts coming during the course of Section 153A proceedings. Tribunal noticed that there was no record to indicate that any material was unearthed during the course of Section 153A proceedings and in such circumstances, the Assessing Officer, while passing the order under Section 153A read with Section 143(3) of the Act, 1961 could not have disturbed the assessment order. See Shri Rajnibhai Jivraj Desai 2020 (3) TMI 495 - ITAT AHMEDABAD - No substantial question of law.

Summary

Issues involved:
1. Interpretation of Section 153A of the Income Tax Act, 1961 regarding the assessment year for which assessment can be made in absence of incriminating material found during search.

Analysis:
The High Court of Gujarat heard a Tax Appeal under Section 260A of the Income Tax Act, 1961, filed by the Revenue against an order passed by the Income Tax Appellate Tribunal. The main question raised was whether the Appellate Tribunal was correct in holding that assessment under Section 153A of the Act cannot be made for an assessment year if no incriminating material related to that year was found during the search. The Tribunal's decision was influenced by a previous case involving Shri Rajnibhai Jivraj Desai, where it was held that assessment under Section 153A cannot be made for concluded assessments without incriminating material found during the search. The Tribunal emphasized that once an assessment has attained finality, the Assessing Officer cannot disturb it under Section 153A unless new materials contradict the previous assessment. The Tribunal found that no incriminating material was discovered during the Section 153A proceedings, leading to the dismissal of the appeal by the High Court.

The Tribunal's decision was based on the principle that in the absence of incriminating material found during the search, the Assessing Officer cannot disturb a concluded assessment under Section 153A. The Court agreed with the Tribunal's reasoning, stating that the question raised by the Revenue was not a substantial question of law. The Court emphasized that the Assessing Officer cannot alter a final assessment under Section 153A without new evidence contradicting the previous assessment. As no such material was found in this case, the appeal was dismissed.