Case Number: ITA 1518/DEL/2020
Appellant: DCIT Central Circle-8, New Delhi
Respondent: Rajyog Buildtech Pvt. Ltd, New Delhi
Assessment Year: 2013-14
Result: Additions Without Incriminating Material Challenged
Case Filed On: 2020-08-28
Order Type: Final Tribunal Order
Date of Order: 2022-07-20
Pronounced On: 2022-07-20
The case of DCIT Central Circle-8 vs. Rajyog Buildtech Pvt. Ltd. revolves around the challenge to the additions made without incriminating material for the assessment year 2013-14. This appeal was brought before the Income Tax Appellate Tribunal (ITAT) Delhi Benches ‘F’, where the appeal by the DCIT was heard and the Tribunal provided specific directions for further proceedings.
Rajyog Buildtech Pvt. Ltd., the respondent, faced a search and seizure action under section 132 of the Income Tax Act, conducted on November 15, 2017. For the assessment year 2013-14, the assessment under section 143(3) was completed on September 5, 2014, prior to the date of the search. The return of income for the assessment year 2014-15 was filed on November 18, 2014, and the time limit for issuing a notice under section 143(2) expired on September 13, 2015, also prior to the date of the search.
As a result, the assessment years 2013-14 and 2014-15 were considered unabated assessments. It is undisputed that the assessment under section 153A was concluded without reference to any incriminating material or documents found and seized during the search.
The core issue in this case is whether any addition is warranted in the absence of incriminating material unearthed during the course of the search, particularly for assessment years where the assessments were already completed or the time limit for issuing a notice under section 143(2) had expired.
The Revenue, represented by the CIT DR, argued that the assessment under section 153A is comprehensive and should include both disclosed and undisclosed income, regardless of whether any incriminating documents were found during the search. The Revenue relied on several judgments, including those from the Kerala High Court and the Allahabad High Court, which supported the view that additions can be made even without incriminating material.
The Assessee, represented by Sh. Amit Goel, Advocate, and Sh. Nipun Mittal, CA, relied on the order of the CIT(A) and argued that the settled legal position, as established by the Hon’ble Delhi High Court in the case of Kabul Chawla, supports that additions can only be made on the basis of incriminating material found during the search.
The Tribunal considered the arguments and reviewed the material available on record. The Tribunal referred to several judgments, including:
The Tribunal noted that the Hon’ble Delhi High Court in Kabul Chawla held that completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or disclosed in the original assessment.
The Tribunal also referred to the recent decision in Pr. CIT v. Meeta Gutgutia (2017) 395 ITR 526, where it was held that in the absence of incriminating material, the invocation of section 153A was not justified.
The Tribunal concluded that the additions made under section 153A in the absence of any incriminating material are not sustainable. The Tribunal upheld the order of the CIT(A) and dismissed the Revenue’s appeal.
Order:
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on July 20, 2022.
Sd/- Saktijit Dey, Judicial Member
Sd/- Dr. B. R. R. Kumar, Accountant Member
Copy to:
// By Order //
Assistant Registrar, ITAT Delhi Benches, Delhi
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