October 2016
Search and seizure- Assessment- Ss. 132, 153A of I. T. Act, 1961: A. Y. 2005-06: No assessment pending at time of initiation of search proceedings- Finding by Tribunal that no incriminating evidence found during course of search- Finalised assessment or reassessment shall not abate
By Keshav B. Bhujle
Advocate
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CIT Vs. Gurinder Singh Bawa; 386 ITR 483 (Bom):
For the A. Y. 2005-06, the assesee’s return was processed u/s. 143(1) of the Income-tax Act, 1961 and no notice u/s. 143(2) was issued. Thereafter on January 5, 2007 a search was conducted in the case of the assessee but no incriminating material was found. However, proceedings u/s. 153A were initiated for the A. Y. 2005-06 and the Assessing Officer added an amount of Rs. 93.72 lakhs u/s. 68 and Rs. 43.67 u/s. 2(22)(e) of the Act. The assesee challenged the validity of the assessment made u/s. 153A, on the ground that no assessment in respect of the six assessment years was pending so as to have abated. The Tribunal accepted the assessee’s submission and held that no incriminating material having been found during the course of search, the entire proceeding u/s. 153A were without jurisdiction and therefore, the addition made had to be deleted.
On appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:
“Once an assessment was not pending but had attained finality for a particular year, it could not be subject to proceedings u/s. 153A of the Act, if no incriminating materials were gathered in the course of the search or during the proceedings u/s. 153A, which were contrary to and were not disclosed during the regular assessment proceedings.”
