2023 (2) TMI 971 - HC - Income Tax

Assessment u/s 153A - whether in absence of any incriminating documents seized during the course of search, AO is justified in making the addition in non-abated assessment orders u/s 153-A r/w Sec 143(3)? - HELD THAT - The appeal before the CIT(Appeals) was directed against the addition of income by the AO taking production on presumptive basis and working out estimated income. The factum of addition not being based on any incriminating material found during the search is not disputed. Exactly identical substantial question of law came up for consideration before this Court at Gwalior Bench in 2019 (7) TMI 1050 - MADHYA PRADESH HIGH COURT these appeals were disposed of holding that in the given facts of the present case, as no incriminating documents during the course of search were found, the order in appeal cannot be said to have suffered any illegality as would give rise to proposed substantial question of law. Consequently, the appeals were dismissed.

Summary

Issues Involved:
Interpretation of Section 153-A read with Section 143(3) of the Income Tax Act 1961 regarding additions in non-abated assessment orders without incriminating documents seized during a search.

Analysis:

The appeal before the High Court was centered around the question of whether the Assessing Officer was justified in making additions in non-abated assessment orders under Section 153-A read with Section 143(3) of the Income Tax Act 1961 without any incriminating documents seized during a search. The Tribunal had previously dealt with the issue of addition of income by the Assessing Officer based on presumptive basis and estimated income, which was challenged before the CIT(Appeals). The fact that the addition was not supported by any incriminating material found during the search was not contested.

A significant precedent was cited where an identical substantial question of law had been considered by a Division Bench of the Court in a previous case. In that case, it was held that in the absence of incriminating documents found during the search, the addition made by the Assessing Officer was not illegal. The Court, in the present appeal, reiterated the decision of the Division Bench and concluded that no different view could be taken in the current case.

Ultimately, the High Court found no substantial question of law in the appeal and dismissed it accordingly. The judgment relied on the previous decision of the Division Bench to uphold the legality of additions in non-abated assessment orders without incriminating documents seized during a search under Section 153-A read with Section 143(3) of the Income Tax Act 1961.