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

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

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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 

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.
However, the court relying on catena of judicial decisions of Rajasthan, Delhi and other courts held that in the present cases, with there being absolutely no incriminating materials found or seized at the time of search, there was no justification for the initiation of assessment proceedings under Section 153A and allowed the writ on this point.
This judgement will have to be seen in the light of amendment made by Finance Act, 2021 in search assessment provisions whereby now the reassessment notices are issued u/s 148.
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

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