The Tax Publishers2019 TaxPub(DT) 5062 (Del-Trib)

INCOME TAX ACT, 1961

Section 153A Section 147

Since reassessment proceedings initiated by AO were unsustainable, therefore, as on the date of initiation of search, no assessment proceedings were pending before AO and in such concluded assessment, no additions could have been made without having any incriminating material found during search.

Search and seizure - Assessment under section 153A - No incriminating material found during search - Section 148 proceedings pending as on date of search being invalidly initiated

AO pursuant to search conducted at assessee's premises framed assessment under section 153A and disallowed deduction under section 80HHC. Assessee challenged this on the ground of no incriminating material found during search and assessment for the relevant year having remained unabated as on date of search. AO rejected this on the ground that reassessment proceedings under section 148 were pending on date of initiation of search, thus, whole of the assessment got abated and AO was empowered to make adjustments to total income in accordance with section 147 as well as any incriminating material found during search. Assessee's case was that re-assessment proceedings had not been validly initiated.Held: In the reasons recorded for reopening of assessment under section 148 AO had stated that there was a mistake in calculation, which had resulted in over statement of export for the purpose of calculation of deduction under section 80HHC. Therefore, it was apparent that AO had nowhere stated as to what was the failure on the part of assessee to fully and truly disclose material facts nor there was any tangible material coming into the possession of AO to reopen assessment, therefore, reassessment proceedings initiated by AO were unsustainable. Therefore, as on the date of initaition of search, no assessment proceedings were pending before AO and in such concluded assessment no addition could have been made without having any incriminating material found during search.

Relied:CIT v. Kabul Chawla (2016) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2003-04



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