'No Incriminating Evidence in Search Proceedings': ITAT Quashes Assessment Order [Read Order]

The bench quashed the assessment order as well as the order of CIT(A), by noting that no incriminating documents were found during the search, which resulted in additions

3 May 2025 11:53 AM IST

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment order, noting the absence of incriminating evidence during the search proceedings. In this case, the assessee, Gopal Garg, had appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year (AY) 2015-16. One of the grounds raised by the assessee during the...

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The Delhi bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment order, noting the absence of incriminating evidence during the search proceedings.

In this case, the assessee, Gopal Garg, had appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year (AY) 2015-16.

One of the grounds raised by the assessee during the appeal before the ITAT was that the CIT(A) failed to consider the fact that the assessing officer (AO) made the additions in the absence of any incriminating material belonging to the assessee being found during the search.

Diving into the facts of this case, the assessee, Gopal Garg, had filed his income tax returns (ITR) for the AY 2015-16 and declared a total income of Rs 19.5 lakhs. After a search and seizure operation was conducted on the premises of the SRS Group on 6-6-2018, assessment proceedings were initiated under Section 153 of the Income Tax Act, 1961, and the total income of the assessee was assessed at Rs. 84.46 lakhs.

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Although the assessee appealed before the CIT(A), the latter partly allowed the appeal and confirmed 2 of the additions made by the AO, which include an addition of Rs. 4.6 lakhs made on account of purchase from M/s Krishna Industries, holding the same as not genuine, and also upheld an addition of Rs. 29.5 lakhs made on account of a loan received from M/s RajatFincap Pvt. The assessee, who was aggrieved by the order of the CIT(A), appealed before the ITAT for relief.

The assessee’s counsel vehemently argued that the additions were made by the AO without any incriminating evidence. The counsel also relied on the judgement of the Supreme Court in the case of PCIT, Central Circle-3 Vs. Abhisar Buildwell (2023) 454 ITR 212 (S.C) and contended that the additions made without incriminating evidences are liable to be quashed.

The ITAT noted that the time limit to issue the notice u/s 143(2) of the Act had already been expired, and as the assessment year under consideration was completed, the assessment could not be disturbed in the assessment made under Section 153A of the Act in the absence of any incriminating material found during the search.

The bench quashed the assessment order as well as the order of CIT(A), by noting that no incriminating documents were found during the search, which resulted in additions

The ITAT, comprising M. Balaganesh (Accountant Member) and Yogesh Kumar U.S. (Judicial Member), partly allowed the assessee’s appeal.

To Read the full text of the Order CLICK HERE

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