Revenue appeals dismissed, CIT(A) deletions upheld, assessments under Section 153A quashed. Incriminating material required for reassessments. NCLT amalgamation orders binding.

The Tribunal dismissed all appeals filed by the Revenue, upholding deletions made by the CIT(A) and quashing assessments under Section 153A. It emphasized the need for incriminating material for reassessments under Section 153A and recognized the binding nature of NCLT amalgamation orders on tax assessments.

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Issues Involved:
1. Legality of additions under Section 68 of the Income Tax Act, 1961.
2. Validity of assessments under Section 153A of the Income Tax Act, 1961.
3. Impact of amalgamation orders by the National Company Law Tribunal (NCLT) on the assessment process.

Summary:

Issue 1: Legality of Additions under Section 68
The Revenue challenged the deletion of additions made under Section 68 of the Income Tax Act, 1961, by the Commissioner of Income Tax (Appeals) [CIT(A)]. The Assessing Officer (AO) had added amounts received as share application money, treating them as unexplained credits. The CIT(A) deleted these additions, noting that no incriminating material was found during the search to justify such additions. The Tribunal upheld the CIT(A)'s decision, emphasizing that the AO relied on statements recorded in other investigations without providing an opportunity for cross-examination, which is against the principles laid down by the Supreme Court in Andaman Timber Industries.

Issue 2: Validity of Assessments under Section 153A
The Tribunal examined whether the AO was justified in invoking Section 153A for assessments when no incriminating material was found during the search. It referred to the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Limited, which held that in the absence of incriminating material, completed assessments cannot be reopened under Section 153A. The Tribunal found that the AO failed to demonstrate the existence of any incriminating material that could justify reassessment under Section 153A. Consequently, the Tribunal quashed the assessments for the years in question, deeming them without jurisdiction.

Issue 3: Impact of Amalgamation Orders by NCLT
For the assessment year 2018-19, the Tribunal considered the effect of amalgamation orders by the NCLT, which had sanctioned the merger of several companies with the assessees. The Tribunal noted that the amalgamation orders were final and binding, and the AO could not investigate the antecedents of the merged companies in the hands of the successor entities. The Tribunal relied on the Supreme Court's decision in Dalmia Power Ltd., which held that NCLT orders have statutory force and are binding on tax authorities. Therefore, the Tribunal concluded that no fresh capital was raised during the relevant year, and the provisions of Section 68 could not be invoked.

Conclusion:
The Tribunal dismissed all the appeals filed by the Revenue, upholding the deletions made by the CIT(A) and quashing the assessments under Section 153A. The Tribunal emphasized the necessity of incriminating material for reassessments under Section 153A and recognized the binding nature of NCLT amalgamation orders on tax assessments.

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