The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that proceedings under section 153 can’t be invalidated without examining incriminating material found in the search.
The assessee, Ashok Developers & Builders Ltd engaged in the business of construction, filed its return of income declaring a total income of Rs.6,61,44,100/-. A search & seizure operation u/s 132 of the Act was carried out in the assessees’ group of cases. The assessee filed a revised return of income of Rs.13,58,60,960/- in response to the notice u/s 153A.
The Assessing Officer completed the assessment u/s 143(3) r.w.s. 153A of the I.T. Act determining the total income at Rs.20,78,40,695/- by making various additions.
The assessee challenged the validity of the assessment proceedings before the CIT(A) on the ground that incriminating material was not found during the search and the statement recorded u/s 132(4) does not constitute any incriminating material. The CIT (A) held the initiation of proceedings u/s 153A of the Act as invalid.
In contra, the revenue contended that a lot of incriminating materials were found and seized during the search and alleged that the CIT (A) without considering the copy of the panchnama and the various annexures etc., seized during the search simply held that no incriminating material was found during the search.
The Tribunal observed from the order of CIT (A) that he neither has decided the appeal on merit nor has passed any comments regarding the various incriminating material found during the search.
Shri R.K. Panda, Accountant Member and Shri Laliet Kumar, Judicial Member restored the issue to the file of the CIT (A) with a direction to give his finding regarding the nature of incriminating material found during the search and appeal filed by the revenue were allowed for statistical purposes.
The assessee was represented by Shri K.C. Devdas and the revenue was represented by Shri Rajendra Kumar.
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