Orissa High Court in the case of  Smrutisudha Nayak Vs Union of India & Ors vide order dated 27th October 2021 has held that Notice u/s 153A of the Income-tax Act 1961 for conducting search assessment cannot be issued in a case where no incriminating materials are found during the course of search.

The Chief Justice bench of Orissa High Court in this case was considering writ where the assessee interalia challenged issuance of notice u/s 153A( as per the law which was then existing) in view of the fact that it was explicitly recorded in the Panchnama that no incriminating material were found or seized.

The Department contended that the original assesssment in this case was not conducted u/s 143(3) of the Act and as such as soon as the search took place, the assessment had to be completed u/s 153A by the jurisdictional officer.

The copy of the order is as under:

If no incriminating material were found or seized at the time of search, there is no justification for the initiation of assessment proceedings under Section 153A