Tribunal upholds CIT(A)'s order, no infirmity in deletion of additions without incriminating material. Revenue appeal dismissed.

The tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of additions made without incriminating material. The appeal of the revenue was dismissed.

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Issues Involved:
1. Delay in filing the appeal.
2. Validity of additions made under Section 153A/143(3) of the Income Tax Act, 1961, without incriminating material.
3. Whether the CIT(A) erred by not making independent inquiries.
4. Applicability of judgments and legal precedents.
5. Whether the assessment should be based on statements and materials not provided to the assessee.
6. Whether the CIT(A) failed to adjudicate on merits.
7. Additional grounds raised by the revenue.

Detailed Analysis:

1. Delay in Filing the Appeal:
The revenue's appeal was delayed by 26 days. The tribunal, after reviewing the petition for condonation, concluded that the department was prevented by sufficient cause from filing the appeal on time. Consequently, the delay was condoned, and the appeal was admitted.

2. Validity of Additions under Section 153A/143(3):
The assessee, a company, filed its original return of income on 26/09/2008. A search and seizure operation was conducted on 18/02/2013, leading to a notice under Section 153A. The revised return declared the same income as the original. The assessment was completed with a total income of Rs. 1,65,87,090/-.

The CIT(A) granted partial relief, relying on the Calcutta High Court decisions in PCIT vs. Salasar Stock Broking Limited and CIT vs. Veerprabhu Marketing Ltd., which held that incriminating material is a prerequisite for making additions in assessments under Section 153A/143(3) where assessments have not abated. The tribunal upheld this view, noting that the additions were not based on any incriminating material found during the search.

3. Independent Inquiry by CIT(A):
The revenue contended that the CIT(A) erred by not conducting independent inquiries to determine the existence of incriminating evidence. However, the tribunal found that the CIT(A) had relied on established legal precedents and the absence of incriminating material during the search, making further inquiry unnecessary.

4. Applicability of Judgments and Legal Precedents:
The tribunal considered various judgments, including those from the Calcutta High Court and the Delhi High Court, which consistently held that additions under Section 153A require incriminating material found during the search. The tribunal also noted the Supreme Court's dismissal of the department's SLP in a similar case, reinforcing the need for incriminating material.

5. Statements and Materials Not Provided to the Assessee:
The revenue argued that statements from entry operators and a cash trail prepared post-search constituted incriminating material. The assessee countered that these were not part of the seized documents and were not provided for cross-examination. The tribunal held that no addition could be made based on materials not confronted to the assessee, emphasizing the principles of natural justice and the right to cross-examine adverse witnesses.

6. Adjudication on Merits by CIT(A):
The revenue claimed that the CIT(A) failed to adjudicate the appeal on its merits. However, the tribunal found that the CIT(A) had adequately addressed the legal issue regarding the necessity of incriminating material for additions under Section 153A, rendering further adjudication on merits unnecessary.

7. Additional Grounds Raised by the Revenue:
The tribunal noted that the department reserved the right to add or alter grounds during the appeal. However, no new grounds were introduced or argued during the proceedings.

Conclusion:
The tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of additions made without incriminating material. The appeal of the revenue was dismissed.

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