By K. B. Bhujle, Advocate
71. Underwater Services Co. Ltd. and Anr. vs. ACIT
[2022] 448 ITR 691 (Bom.)
A.Y.: 2012-13
Date of order: 21st October, 2021
Sections: 132, 132A and 153A of ITA, 1961
Search and seizure — Assessment of undisclosed income — Notice u/s 153A should be based on material seized u/s 132 or documents requisitioned u/s 132A.The assessee filed a writ petition and challenged the validity of the notice dated 29th November, 2018 issued u/s 153A of the Income-tax Act, 1961 on the grounds that the notice has been issued without jurisdiction. The assessee-petitioner contended that there is no incriminating material in possession of the AO and any notice u/s 153A can be issued only on the basis of incriminating material discovered during the course of the search.
The Bombay High Court allowed the writ petition and held as under:
“i) Although section 153A of the Income-tax Act, 1961, does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material.
ii) Obviously, an assessment has to be made u/s. 153A only on the basis of seized material. Issuance of a showcause notice is the preliminary step which is required to be undertaken
