Assessment u/s 153A is Limited to Search Income only: Gujarat HC [Read Judgment]

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In Principal CIT v. Deepak J Panchal, the division bench of the Gujarat High Court reiterated that the assessment under section 153A of the Income Tax Act is limited to search income only.

The revenue preferred an appeal against the order of the Tribunal whereby it was held that the scope of Section 153A is limited to assessing only search related income. The Revenue submitted that while holding so, the Tribunal denied them the opportunity of taxing other escaped income, that comes to the notice of the Assessing Officer.It was contended that as per the Section, the Assessing Officer has to asses the total income for the six Assessment Year and therefore, the provision cannot be limited to undisclosed income only.

The division bench comprising of Justice M.R Shah and Justice B.N Karia bench found that the issue is squarely covered by the decision in Principal Commissioner of Income Tax-1 Vs. Devangi Alias Rupa and the decision of the Delhi High Court in CIT Vs. Kabul Chawla.

The Court further relied upon the decision in Principal Commissioner of Income Tax -4 Vs. Saumya Construction Pvt wherein it was held that the Assessing Officer while framing the assessment under Section 153A of the Income Tax Act for the block period may make addition considering the incriminating material found for the year under consideration only which was collected during the search.

Read the full text of the Judgment below.