Interesting case- If there is no incriminating material found during the course of search AO cannot make any addition on the basis of information called during assessment proceeding.
Search and seizure—Assessment in case of search—A search u/s 132 was conducted at assessee’s premises—Consequently notices u/s 153A along with 143(2) and 142(1) were duly issued and served upon assessee—In reply, assessee filed return of income—During assessment proceedings, various information was called relating to transactions entered in books of accounts—AO made additions based on such information—CIT(A) held impugned assessments u/s 153A as invalid—Held, assessee’s case could have been picked up for scrutiny assessment by issuance of notice u/s 143(2) latest by 30.9.2010 however, same was not issued to assessee—Search u/s 132 conducted after expiry of time limit for issuance of notice u/s 143(2) for AY 2009-10—No incriminating material pertaining to AY 2009-10 was found during the course of search—AY 2009-10 would come under category of completed and non-abated assessment and AO could make additions in such assessments only based on incriminating material found during course of search—In assessee’s case, there was no incriminating material found during course of search—AO could not make any addition based on information called during course of assessment proceedings and therefore, CIT(A) had rightly held impugned proceedings u/s 153A r/w s. 143(3) as invalid—Revenue’s ground dismissed.
DEPUTY COMMISSIONER OF INCOME TAX & ORS. vs. MCS TRADING COMPANY PVT. LTD. & ORS.
(2019) 55 CCH 0405 IndoreTrib