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TMI BlogInterpreting Section 153A: ITAT Delhi's Stand on Incriminating Material in Assessments: Assessments following search and seizure operation.X X X X Extracts X X X X X X X X Extracts X X X X ..... nal (ITAT) in Delhi, in a recent judgment, dealt with a pivotal issue pertaining to the legitimacy of assessments under Section 153A of the Income Tax Act, 1961 (the Act), in cases where the assessment is claimed to be based on incriminating material unrelated to the assessee. This article provides an in-depth analysis of the legal principles and the ITAT's decision in this matter. II. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately preceding the assessment year relevant to the previous year in which the search is conducted. Jurisdiction under Section 153A : The pivotal legal question is the extent of the AO's jurisdiction under Section 153A, particularly concerning assessments that are not based on any incriminating material unearthed during the search operation. IV. Assessee s Contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zing that once proceedings under Section 153A are initiated, the AO has broad powers to assess or reassess the total income, including reliance on evidence gathered from parallel search operations. VI. ITAT s Decision Invalidity of Assessments Based on Third-Party Statements : The ITAT held that the statement of a third party obtained in separate search proceedings cannot be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Remarks This judgment underscores the principle that assessments under Section 153A must be based on incriminating material specifically related to the assessee(s). It limits the AO's authority to make additions and disallowances based on evidence unrelated to the assessee(s). This decision is significant in safeguarding taxpayers' rights and ensuring that assessments under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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