Reassessment Proceedings u/s 153 A Income Tax Act cannot be Triggered in Absence of Incriminating Material: Delhi HC [Read Order]

In a recent case, the Delhi High Court reassessment proceedings under section 153 A of the Income Tax Act, 1961 cannot be triggered in the absence of incriminating material.

The appellant/revenue, seeking condonation of delay in filing the appeal. The appellant/revenue, there is a delay of 113 days. Mr Bhupinderjeet Singh appeared on behalf of M/s. Saluja Construction Co. Ltd, the respondent/assessee does not oppose the prayer made in the application.

The delay is, accordingly, condoned. The application is disposed of in the aforesaid terms. This appeal concerns Assessment Year (AY) 2008-09.  The appellant/revenue challenged the order dated 20.04.2020, passed by the Income Tax Appellate Tribunal [“Tribunal”].

The Assessing Officer (AO) added to the taxable income of the respondent/assessee Rs.3,50,00,000/- albeit, under Section 68 of the Income Tax Act, 1961 [“Act”], as according to him said amount represented undisclosed income.  

The addition was made under a search and seizure operation, which took place at the respondent/assessee’s premises on 12.01.2012 and 11.09.2013. The record also shows that notices under Section 153A of the Act were issued on 08.07.2013 and 25.11.2014.  

The record further discloses that on 23.03.2016, the assessment under Section 153A was completed vis-à-vis the respondent/assessee. The assessed income of the respondent/assessee, after making an addition of Rs.3,50,00,000/- under Section 68 of the Act, was pegged at Rs.7,89,74,840/-. 

The assessment order, as indicated above, was framed under Section 143(3) of the Act. The Tribunal concluded that since no incriminating material was found, the reassessment proceedings under Section 153A of the Act could not have been triggered without the discovery of such material by the respondent/assessee.

A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that in the absence of the incriminating material, no addition could have been made by the AO about the AY in issue, as it was a case of completed assessment.

In light of the judgement of the Supreme Court in Principal Commissioner of Income Tax vs. Abhisar Buildwell, the court dismissed the petition.

To Read the full text of the Order CLICK HERE

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