|CORAM:||Mahavir Singh (JM), Shamim Yahya (AM)|
|CATCH WORDS:||abatement of assessment, incriminating material, undisclosed assessment|
|DATE:||September 24, 2014 (Date of pronouncement)|
|DATE:||October 5, 2014 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|An assessment u/s 153A & 153C cannot be made in the absence of incriminating material found in search|
It has been held by the ITAT, Kolkata Bench in the case of LMJ International Limited vs DCIT 119 TTJ (Kol) 214 where nothing incriminating is found in the course of search relating to any assessment years, the assessments for such assessment years cannot be disturbed u/s 153C of the Act. Thus it is clear that the provisions of section 153C of the Act cannot be invoked automatically in respect of any assessment year unless there exists incriminating documents for that previous year. The provision of section 153C of the Act cannot be invoked on routine information or on income already accounted/disclosed in the original return, the assessment of which is complete. In this regard we may gainfully refer to the decision of the Mumbai Special Bench of the ITAT in the case of Alcargo Global Logistics Ltd vs DCIT.
(ii) We find that the above interpretation which is with respect to section 153A of the Act should also be extended to assessment u/s 153C of the Act. It will be a absurd proposition that the person who is searched u/s 153A of the Act can be assessed only on the basis of incriminating material found and the other person who is assessed u/s 153C of the Act in connection with the same search should be assessed de hors any incriminating material.
(iii) We find that the above view is supported by the amendment to section 153C of the Act w.e.f. 01.10.2014. The provision to section 153C(1) prior to the amendment and sub-section to the amendment are already reproduced in assessee’s submission herein above. From the above we find that the provision of section 153C(1) was amended to obviate practical difficulties which arose in its interpretation. To put it simply this amendment to proviso to section 153C(1) of the Act debars the AO from making any assessment dehorse any incriminating material found during the search. Thus in our view this amendment supports the view expressed by us.