The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that the addition of unabated assessment without incriminating seized material for assessment under section 153A is not sustainable.
The assessee, Dinesh Salecha is an individual and filed her return of income for the assessment year 2008-09, declaring total income of ` 3,90,830. There was a search and seizure action carried out against the RSBL group under section 132 of the Act and the assessee was also covered. The notice under section 153A of the Act was issued. The assessment under section 143(3) read with section 154A of the Act was completed in the case of all the years.
The CIT(A) in the appellate order elaborately referred to the modus operandi of the various persons said to be entry operators. He elaborately referred to the statements obtained upon survey of various parties.
The CIT(A) upheld the addition under section 68 by observing that the financials of the lenders were not sufficient. However he did not address the assessee’s challenge to jurisdiction of assessment under section 153A was without reference to search material.
The jurisprudence regarding jurisdictional defects in assessment under section 153A /153C without reference to incriminating seized material has also been expounded by the Supreme Court in the case of CIT v/s Singhad technical education Society.
The Coram consisting of Ram Lal Negi and Shamim Yahya while setting aside the orders and deleting the additions noted that the addition made in the assessment orders passed by the assessing officer under section 153A without reference to any incriminating material found search is not sustainable.
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