The Income Tax Appellate Tribunal ( ITAT ), Chennai has held that a document which is already in available to the Assessing Officer is not an ‘incriminating material’ for the purpose of assessment under section 153C of the Income Tax Act.
Assessment proceedings were initiated against the assessee inconsequent to a search. Later, an addition was made on account of advances in cash during the relevant period.
On the first appeal, the CIT(Appeals) deleted the addition on finding that there was no incriminating material found during the course of the search operation.
The department contended that the incriminating material in the form of audited tally statement was found and therefore, the addition is valid.
The Tribunal, after analyzing the provisions of Section 153A and 153C of the Act, noted that when the assessment was concluded either by the order under Section 143(3) of the Act or otherwise by operation of law cannot be reopened.
“The reassessment or the assessment has to be made under Section 153A / 153C of the Act only on the basis of the incriminating material found during the course of the search operation. In this case, the Revenue claims that audited statement in the form of tally accounts was said to be found during the course of the search operation. It is not in dispute that the very same document was already available before the Assessing Officer along with the return of income. Therefore, at any stretch of the imagination, it cannot be said that the audited statement in the form of tally accounts is an incriminating material found during the search as claimed by the Revenue. In the absence of any incriminating material, this Tribunal is of the considered opinion that there cannot be any assessment under Section 153A / 153C of the Act as found by the CIT(Appeals),” the Tribunal said.
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